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updated 1/14/2005 10:17:59 AM ET 2005-01-14T15:17:59

The U.S. is investigating the risk of losing its share of Venezuela's oil exports as the government of President Hugo Chávez seeks to steer more supplies towards China and other nations.

The U.S. Government Accountability Office (GAO), Congress's non-partisan investigative agency, will examine the potential impact following a request from Richard Lugar, Republican chairman of the Senate foreign relations committee.

Venezuela accounts for about 15 percent of U.S. crude oil supplies and also has the largest proved reserves in the western hemisphere. Oil prices rose in the U.S. when supplies were disrupted in late 2002 and early 2003 by a strike at Petróleos de Venezuela, the state-owned oil company.

“We must make sure that all contingencies are in place to mitigate the effects of a significant shortfall of Venezuelan oil production, as this could have serious consequences for our nation's security and for the consumer at the pump,” Mr. Lugar said in a letter to the GAO, obtained by the FT.

Although another strike is not seen as likely, Mr. Chávez has since warned that he would send “not one more drop” of oil to the U.S. if Washington sought to oust him.

He has also courted increased investment from non-U.S. oil companies, principally from China, which he has described as the best option for breaking with “100 years of U.S. domination” over its oil industry.

Western oil companies are already re-evaluating their investment plans in Venezuela after Mr. Chávez's surprise decision last October to raise the royalties they must pay. Ali Rodriguez, Venezuela's foreign minister, said recently that his country was not seeking to deny oil to the U.S., but was diversifying its markets. Venezuela is studying how it can ship oil to China, either through the Panama Canal or via a pipeline across the Panamanian isthmus.

“The U.S. will not look favorably on Panama aiding Venezuela to sell its oil to a competitor of the U.S.,” said a U.S. official. In practice, however, analysts say that in the short to medium term, it will be difficult for Venezuela to ship its oil to China instead of the U.S. Refineries in China are not configured to take Venezuelan oil, which is particularly heavy, and China would need probably two years to adjust.

Venezuela has recalled its ambassador to Colombia, accusing the neighboring country of bribing Venezuelan authorities to participate in the capture of a Colombian rebel in Caracas, AP reports from Caracas. José Vicente Rangel, vice-president, said Colombia's government paid “a bribe” to Venezuelan security officials to capture Rodrigo Granda, a leader of the Revolutionary Armed Forces of Colombia.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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