Monday, Jul. 11, 1977

Oil and Abrazos in Washington

He is a certified Third World spokesman and a leading advocate of a "new international economic order." At the same time he is an OPEC chieftain presiding over a burgeoning economy and the head of one of Latin America's few democracies. With all those credentials, Carlos Andres Perez, the expansive President of Venezuela, was assured warm abrazos when he arrived in Washington last week as the first South American statesman to get a come-visit invitation from Jimmy Carter.

During his two-day stay, "Cap" Perez hit it off big with his White House host. Carter praised his commitment to "individual freedom and liberty," as well as his leadership in lobbying for tighter controls over nuclear proliferation. Perez applauded Carter's stand on human rights, saying, "Many years have passed since small and weak nations heard a voice rise from a great nation to tell the world that human values are paramount." In the 43-min. toast that Perez delivered at the state dinner, he struck one of his favorite themes: improving the dialogue between the developed and the developing countries. Later, Perez had a post-midnight talk with Carter. "They like each other." explained Perez's interpreter. "Ya son amigos--they are already friends."

The Administration is persuaded that the Caracas regime can play a valuable role as a bridge--one of Perez's favorite words--to the nonindustrial countries. The U.S., says a White House aide, needs "the support of a key leader of the Third World on a lot of major is sues. Venezuela has influence where we have none or little." Carter listened with interest to Perez's advocacy of a new economic deal for the Third World because "for better or for worse," as one U.S. diplomat put it, Washington recognizes Perez as an effective spokesman.

One of the items on the agenda for Perez's talks was oil. Venezuela has cut its shipments to the U.S. by about one-third in a conservation program. The country's reserves are due to run out by the end of the century. Today Venezuela accounts for only 41 1/2% (88 million bbl.) of total U.S. oil imports, the lowest level in 30 years.

Fuel Source. Perez is keenly interested in a U.S. oil-extraction process that could allow Venezuela's big Orinoco tar pools to be developed as a fuel source. The problem is that Caracas nationalized the petroleum industry 18 months ago and now many firms are wary of risking more capital in Venezuela with its new, highly nationalistic investment rules. As for the question of preferential tariff treatment for Venezuela, eliminated by Congress for all OPEC members after the 1973 oil embargo. Carter promised to do all he could to get Congress to rectify the punitive measure.

There was no question that Washington was impressed by Perez. Said a White House official after he departed: "His country is one of the few surviving democracies of Latin America, a $3 billion-a-year market for U.S. goods, and is interacting with the U.S. in a brand-new way. Thank God, he's a guy with whom we can still hold a dialogue."

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