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Caracas, Venezuela - When Illich Ramirez Sanchez, aka Carlos the Jackal, burst into an OPEC meeting in Vienna in 1975, capturing Saudi Arabia's oil minister and loading him onto a plane for Algeria, the Venezuelan gunslinger probably couldn't have imagined his country would surpass the desert kingdom to hold the world's largest proven petrol reserves just a few decades later.
The infamous attack on the Organisation of Petroleum Exporting Countries (OPEC) was seen by some analysts as an attempt by the Jackal's backers to boost world oil prices by pumping fear into commodities markets.
Today, with oil trading at $100 a barrel, Carlos may have lived to see his old plan come to fruition through other means, as he watches the market gyrate from a French prison.
Venezuela has been one of the largest beneficiaries of Carlos' long-deferred dream of high-prices. And, Rafael Ramirez, the man presiding over Venezuela's national oil company - guardian of the world's largest certified reserves - is said to be the Jackal's first cousin. That's according to Dr Rafael Orihuela, former political director of the Movement for Socialism, and now a political analyst in Caracas.
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"Rafael Ramirez is a well prepared economist; his ideological background comes from communism," Orihuela told Al Jazeera. "And he is first cousins of Carlos the Jackal. They both come from an old school communist family."
Rafael Ramirez, who wasn't reachable for an interview, has denied having family connections to the Jackal, and Ramirez is a common surname in Venezuela. But there is certainly an oily historical trajectory linking the two men and their desire for higher prices, even if they aren't cousins.
Power and oil
Since deceased president Hugo Chavez won his first election in 1998, launching the era of "21st century socialism", Venezuela has spent billions from oil rents on social programmes, a set of populist policies that would have been impossible without historically high petroleum prices.
Even in a country divided by two drastically different political ideologies - a socialist government and capitalist opposition - there is near universal consensus that Chavez and his oil minister Ramirez played the OPEC card well in the early days of the "Bolivarian revolution".
"Chavez brought OPEC leaders together and began a campaign for higher prices," Angel Suzzarini, a Socialist Party member, told Al Jazeera. "That paved the way for a better distribution of wealth and the new social programmes."
Analysts say Venezuela can claim primary responsibility for the price of oil jumping from $8 a barrel in 1998 to $30 just three years later, by strengthening production quotas in tandem with other price hawks such as Iran.
After that, the market psychology of fear and greed took over, say experts, especially following the 2003 US-led invasion of Iraq, causing prices to spike above $140 and then settle back down to around $100.
"Through the 1980s, the argument was he who supplies the most oil to the world gets the most wealth," said Orihuela, a government critic. "That's a neoliberal argument and it made prices go down. Objectively, the strategies of PDVSA [in strengthening OPEC] have been correctly managed."
The transfer of wealth from consuming to producing countries emboldened Venezuela's government. Flush with oil money as a result of shrewd manoeuvring at OPEC and global changes, Chavez helped form the Bolivarian Alliance for the Americas (ALBA), a regional block of left-wing governments aimed at countering US influence in the region.
Cuba is now receiving some 100,000 barrels of oil daily on preferential terms, a crucial lifeline for the Castro government, while other allies benefit from similar petrol-fuelled largess. Venezuela is giving away about one third of its oil to allies at below market prices, costing the state about $20bn annually, according to a report by the Eurasia consultancy group.
Opposition presidential candidate Henrique Capriles has promised to end foreign energy subsidies in the unlikely event he is elected on Sunday.
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At home, PDVSA has been transformed into a "state within a state", challenging the oil game's old guard in Houston and Riyadh.
In 2012, Venezuela's oil reserves were certified at 296.5 billion barrels by BP's Statistical Review of World Energy. This amounts to 18 percent of the global total, compared with Saudi Arabia’s 16 percent.
With some 100,000 employees, PDVSA forms the backbone and piggy bank of Venezuela's push towards socialism, a project now administered by Cuban-educated interim president Nicholas Maduro .
The company now administers food distribution centres, public housing projects, political activities and other projects.
Despite Venezuela's oil windfall, critics say the sector has been mismanaged in recent years. Production dropped more than 25 percent between 1998 and 2012 to about 2.4 million barrels per day, according to OPEC.
Venezuela exported about 1.7 million barrels per day in 2010, according to 2012 figures from the US Energy Information Administration, a significant drop from previous years. About 40 percent of exports flow to Venezuela's traditional trading partner and "imperialist" rival, the United States.
A lack of refining capacity and high domestic consumption due to subsidies mean Venezuela actually imported 100,000 barrels of gasoline daily in the final quarter of 2012, according to an energy market expert at Medley Global Advisors.
Despite robust trade, dependency on the US market irks Venezuelan administrators for practical and ideological reasons. Bernard Mommer, the number two official at PDVSA and the technocratic brains of the operation, has reportedly gone looking for new markets.
Formerly a senior researcher at the Oxford Institute for Energy Studies and the author of Global Oil and the Nation State , Mommer is seen as a key architect of Venezuela's burgeoning relations with China and a firm defender of public ownership for energy resources.
"Mommer always had a strong ideological view against the US," José Toro Hardy, a former member of PDVSA's board of directors, told Al Jazeera. "He managed to convince PDVSA to stop selling security bonds in the US." That decision means the oil company is no longer registered with the Securities and Exchange Commission (SEC), Hardy said, making some US transactions more difficult and pushing Venezuela to find new customers.
To sell bonds and raise money for social projects, Venezuela has looked east.
Shipments to China from the Bolivarian republic rose nearly ten-fold between 2006 and 2013, to about 500,000 barrels per day. The state-run China Development Bank Corporation has lent Venezuela $46.5bn since 2008, according to a January report from Tufts University, and some of these loans are being paid with oil directly from the tap.
About half of PDVSA's $36bn in debt is held by China, Eurasia Group reported, and Venezuela's national government reportedly owes tens of billions more.
China's interest in Venezuela's black gold ramped up in 2007, said Tom O'Donnell, an independent energy analyst, as the nominally communist giant made some of its largest investments anywhere in the world, building three refineries in China to process heavy crude, super-tankers, and assets in Venezuela.
China's deals, marked by loans-for-crude, have Venezuela focused on developing the crown jewel of its oil reserves - the Orinoco belt.
Situated in eastern Venezuela, the Orinoco contains heavy oil, similar to that found in Canada's tar-sands. Extracting the crude requires large amounts of water, taking a heavy toll on the environment. Currently, exploitation has barely begun, as the rural area lacks infrastructure and investment.
The inclusion of this heavy crude, previously considered uneconomic to exploit, in international accounting on oil assets, was the driving factor behind Venezuela's new status as holder of the world's largest reserves.
After lending Venezuela money and making a bid for the lucrative - and untouched - Junin and Carabobo deposits, China faced an unpleasant surprise.
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"Carabobo 2 is one of the richest fields in the Orinoco," O'Donnell told Al Jazeera. "Sinopec made a nice bid and the Chinese thought they would get the field. Then [Russian President Vladimir] Putin came to town and Chavez gave it to the Russians."
Angry about loans designed to guarantee access energy access not getting results, China put a halt on new credit for Venezuela.
"On the Venezuelan end, production hasn't risen, the Chinese haven't gotten the fields, and the houses, roads and pipelines [needed to access one of the world's richest untapped deposits] haven't been built," O'Donnell said.
Oil analysts in Beijing are likely waiting with anticipation to see who wins Sunday's election and what direction a new government will design for PDVSA.
If Maduro wins and Ramirez keeps his job leading the national oil company - a likely scenario - China will have to decide how it should approach one of the western hemisphere's greatest prizes. It could loan Venezuela more money, hoping the need for hard currency and increased production will speed things along. Or it could play the waiting game.
The standard view among energy traders in London and New York is that Venezuela has made serious tactical mistakes in managing its oil industry. Debt to China has spiked, production is down by about a quarter since 1998 and PDVSA has become bloated with political appointments, while losing many of its key engineers in an oil strike in 2002.
Politics and oil have become inextricably linked, as is often the case, but critics worry Venezuela is fostering the former at the expense of the later.
"Venezuela made a political decision to seek new allies with countries whose only thing in common was that they regard the US as their foe," said Hardy, the former PDVSA board member. "From an economic point of view, this represents a difficult issue.
"An oil tanker leaving the shores of Venezuela takes about five days to make it to the US gulf coast, where Venezuela owns a set of huge refineries designed specifically to process acidic and heavy crude oil," he said. "That same tanker needs about 40 days to make it to China, where there are no refineries able to process Venezuelan crude."
For Venezuela's long-term national interest, however, Rafael Ramirez's success in boosting oil prices with the help of new allies has complemented the erstwhile plan of his "terrorist cousin", transforming the global energy game and the balance of power in Latin America and beyond.
Follow Chris Arsenault on Twitter: @AJEchris
Source: Al Jazeera