The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

Pérez Alfonzo had vowed never to allow himself to be seduced by the trappings of power, and once back in office, he kept to a simple, disciplined, and parsimonious life. He carried his own sardine sandwiches to the office for lunch. He also brought to his new office a sophisticated understanding of the structure of the oil industry as well as his own clearly defined objectives. He wanted not only to increase the government’s share of the rents, but also to effect a transfer to the government, and away from the oil companies, of power and authority over production and marketing. To sell oil too cheaply, he argued, was bad for consumers, as the result would be the premature exhaustion of a nonrenewable resource and the discouragement of new development. For the producing countries, oil was a national heritage, the benefits of which belonged to future generations as well as to the present. Neither the resource nor the wealth that flowed from it should be wasted. Instead, the earnings should be used to develop the country more widely. Sovereign governments, rather than foreign corporations, should make the basic decisions about the production and disposition of their petroleum. Human nature should not be allowed to squander the potential of this precious resource.14 Yet Pérez Alfonzo was also motivated by shrewd commercial judgment. He knew that while Venezuela had a kinship with the oil-producing nations of the Middle East, those nations were also dangerous competitors. Venez...