Venezuela and Taiwan Trouble

The international media has been reporting on the emerging trouble between Taiwan and Venezuela over oil and China ties. For example:

Taiwan's CPC has a 7 per cent stake each in two sites, Paria East Block and Paria West Block, which are vital to Taiwan's energy needs.

CPC won the right to explore Paria East Block in 2003 where test drilling for oil continues. Conoco Philipps of the US owns majority state in Paria East Block and CPC owns 7.5 per cent stake.

CPC was allowed to drill for oil in Paria West Block in 1998 which has just begun to produce oil. Conoco Philipps owns a majority stake in it, while CPC has a 10 per cent stake.

Besides Paria East and West blocks, Conoco Philipps also has stake in other oil fields in Venezuela.

Taiwan imports 99.7 per cent of all the oil it consumes. The crude comes from long-term oil suppliers as well as oil from CPC's overseas oil fields.

CPC imports 220 million barrels of oil each year, averaging 602,000 barrels per day.

Venezuela, the world's fifth-largest oil exporting nation, is only one of the countries where CPC is drilling for oil. Others include Chad, Ecuador, Indonesia and Australia.

Taiwan press said CPC's talks to defend its oil fields in Venezuela will be difficult because Taiwan does not have diplomatic ties with Venezuela and President Hugo Chavez is determined to nationalize all oil companies and oil fields to assert greater control over his country's economy.

Taiwan's problems date back to China's move into Latin America as the Bush Administration obsessively pursues its defeats in Iraq and Afghanistan. In the future, if China takes Taiwan, the defeat in Iraq will be widely identified as the turning point.

This issue has been building for some time. In 2004 and 2005 Chavez and China exchanged visits. After the 2005 visit, the Chinese Foreign Ministry said that:

On the same day, China and Venezuela issued the joint press communiqué. The communiqué indicated: both sides are pleased to see that on President Chavez's visit to China in 2004, Venezuela declared its decision to recognize China's complete market economy status; in order to create long-term stable and equitable trade environment, both sides commit to further develop and strengthen bilateral economic cooperation; Venezuela reaffirms its adherence to one-China position, opposes "Taiwan Independence", and supports China to enact "Anti-Secession Law" and realize national unity through the policy of "peaceful reunification and one country, two systems".

Oil industry publications are pointing out that China is set to replace the US as Venezuela's biggest oil buyer in a few years. However, some analysts are skeptical, observing that Venezuelan production is on the decline.

An unattributed China Times report on the Taiwan-Venezuela situation has been widely circulated in the world media. Here AP says:

The report on Taiwanese diplomats appeared in the electronic edition of the mass circulation China Times.

The report, which was unattributed, said that Venezuela would not renew visas for Taiwanese diplomats in the country, forcing them to leave the country.

Foreign Ministry spokesman David Wang did not comment directly on the China Times story, but acknowledged that Venezuelan President Hugo Chavez was making it difficult for Taiwan to operate in the South American country.

"As soon as Hugo Chavez came to power, Taiwan has been facing a new, unfriendly environment in Venezuela," he said.

Wang said that the visa of one of Taiwan's five diplomats in Venezuela had already expired and it was not clear if it would be renewed.

The pressure on the Taiwanese diplomats comes amid rapidly improving relations between Venezuela and China.

In March the two countries created a US$6 billion (4.5 billion) fund to boost energy cooperation and finance joint development projects, and Li Changchun, a top-ranking member of China's ruling Communist Party visited Caracas.

Meanwhile, CPC said the Venezuelan government was pressing it to sell back the 7.5 percent shares it holds in two Venezuelan oil fields.

Taiwan News has a similar report:

It would be an "over-exaggerated claim" to say Taiwan is ready to shut down its trade office in Venezuela in the near future, said the Ministry of Foreign Affairs yesterday while admitting that Caracas has said it will not renew Taiwanese officials' diplomatic visas once they expire.

MOFA spokesman David Wang also said that since the end of March, Venezuela has canceled the 90-day visa waiver option for Taiwanese passport holders. However, the ministry is still investigating whether the recently tightened visa policy was a general rule for all foreigners or if it was targeted against Taiwan.

'A dark cloud'

"We still need to get to the bottom of the sudden attitude change by the Venezuelan government. There has been a dark cloud hovering over Taiwan-Venezuela relations since Hugo Chavez came to power," Wang said.

The problems between Venezuela and Taiwan have been building for quite a while, according to all serious commentators. Fortunately, our favorite anti-Taiwan blogger, Roland Soong over at ESWN, supplies some comic relief:

Ah, no, that was not what was being said. The break was dated back to the inauguration of Nicaragua president Daniel Ortega in January 2007. At the time, Venezuelan president Hugo Chavez arrived late and hurried over to the venue. As he walked through, Taiwan president Chen Shui-bian rushed up to shake his hand.

According to reports, Chavez had no idea who this person was but he was polite to reciprocate. The international media (especially the Taiwan media) published this handshake as if this was a big deal and thereby mainland China to complain. Chavez was very displeased and all those resulting actions are now taking place. This photograph may be good for internal political consumption in Taiwan to show President Chen working hard on foreign diplomacy, but it was bad in terms of practical diplomatic relationsihp. It can be argued whether the handshake created the hostile environment now. During the ongoing problems about visa extension, the Venezuelan government refused to provide any formal documentation about their intent. When the China Times reporter went to inquire, the official response was: "What documentation? We don't even recognize this government!"

Yes, you read that correctly -- Taiwan-Venezuela trouble has nothing to do with the geopolitics of oil, Hugo Chavez' politics, and the faltering US presence in Latin America. It's all Chen Shui-bian's fault. Up next: Roland's explanation of how East Asian typhoons are caused by Chen Shui-bian's educational policies.

[Taiwan] [US] [China] [Chen Shui-bian] [Venezuela]