The Latin Oil Czar

Whe

n Ali Rodriguez was one of Venezuela's communist guerrillas in the 1960s and '70s, his chief duty ostensibly was making bombs. But Rodriguez admits he knew less about explosives than about oil — the stuff of real political power in Venezuela, which possesses the hemisphere's mother lode of petroleum reserves. "In the mountains, I organized seminars on oil administration," says Rodriguez, 66, whom fellow combatants remember as being the same energy-policy wonk then that he is today. "I committed myself body and soul to it." Not surprisingly, his petro-philosophy was more Marx than Rockefeller, and his rhetoric even now might give a capitalist oilman cold sweats. "The people are the owners of their natural resources," says Rodriguez, "so we all have a proprietary actor's role on the oil stage."

Venezuela's revolutionaries never did seize that stage by arms. They took it via votes, when left-wing President Hugo Chavez was elected in 1998. Rodriguez became Energy Minister and then in 2002 won the role of his dreams as president of Petroleos de Venezuela (PDVSA), the nation's $46 billion state-run oil monopoly and one of the U.S.'s top three suppliers. Instead of theorizing from a mountain lair, Rodriguez is perched in an office above Caracas, helping shape the world oil market. "I never imagined I'd be sitting here," Rodriguez tells TIME. "But then, if you know exactly what your future is, it makes life less interesting."

The curtain is rising this summer on Rodriguez's most interesting act yet: a five-year, $37 billion PDVSA plan to revive and expand oil production while budgeting almost $2 billion a year for antipoverty initiatives ranging from potable-water to literacy projects. Making PDVSA (called Pedevesa) an oil firm cum development agency will be daunting, even with crude prices hovering near $40 a bbl. Venezuela's oil industry has been waylaid by political turmoil, including a reckless near shutdown by anti-Chavez managers and other employees at PDVSA in 2002 and 2003, intended to paralyze the industry and force Chavez's resignation. The stoppage, which Rodriguez calls "sabotage," at one point slashed the nation's oil output to a scant 50,000 bbl. a day and cost the economy well over $7 billion. It dented U.S. imports for months and ended in the dismissal of 19,000 PDVSA employees, half the company's work force. Though Rodriguez insists that PDVSA is pumping more than its prestrike level of 3.1 million bbl. a day, analysts say the company is barely reaching 2.5 million bbl. a day. "The market," says a U.S. oil analyst, "is watching Ali Rodriguez perhaps more closely than any other oil executive in the world right now."

Americans should be watching too. Venezuela, which sits atop 78 billion bbl. of oil — and as much as 270 billion bbl. of extra-heavy crude — is the world's fifth largest oil exporter. It's also a founding member of the OPEC oil cartel (the 11-nation Organization of Petroleum Exporting Countries). In past decades, to please consumers in the U.S.--PDVSA's biggest market, which buys two-thirds of its exports — Venezuela often ignored OPEC's guidelines, stepping up production even when oil prices hit rock bottom in the late 1990s. But Chavez, a harsh critic of the U.S. who accuses the Bush Administration of backing a failed coup against him in 2002--a charge the White House denies — has led a successful campaign to revive a demoralized OPEC, curtailing Venezuelan production to gain what Rodriguez calls "fairer prices."