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PDVSA with new board and more control by Venezuela's president


Petroleumworld.com 01 31 2017

Venezuela's Maduro seen bolstering grip on PDVSA after shake-up

PDVSA's new senior executive line-up includes a Venezuelan navy rear-admiral, Hugo Chavez's former Twitter manager and a leader of the late leftist president's failed 1992 coup.

The selections, announced as part of a sweeping executive shakeup of Venezuela's struggling state oil company on Sunday, suggest former President Chavez's unpopular successor Nicolas Maduro is strengthening his grip on the enterprise that powers the OPEC country's economy.

Maduro said the overhaul was aimed at stamping out corruption at the company that oversees the world's biggest oil reserves and has been linked to major bribery cases in the United States.

PDVSA [PDVSA.UL] President Eulogio Del Pino, a Stanford-educated engineer, was kept on, but most of his top executives, several with long oil careers, were removed.

With little to no oil industry expertise on their resumes, the replacements draw heavily from Venezuela's political and military arena at a time when PDVSA's production has tumbled to a two-decade low and the company is struggling with export delays and refinery outages.

"If it was very bad (before), with these people who have no experience it's going to be even worse," said Francisco Ibarra, an economist with Caracas think-tank Econometrica. "I don't know how much worse."

To be sure, PDVSA's outgoing executives were also openly pro-government, and the oil industry has declined significantly under their watch.

But current and former PDVSA employees, consultants and executives at foreign companies are privately expressing worries the new heads have scant knowledge of the oil industry.

Maribel Parra, for instance, a rear admiral whose career has largely been in the armed forces, will run the newly created executive vice-presidency with no apparent experience in the energy sector.

Ismel Serrano, tapped to run the key commerce and supply division, was identified in a state TV interview as a coordinator of Chavez's widely followed Twitter account and has since worked under Tareck El Aissami, the former governor of Aragua state whom Maduro appointed as vice president earlier this month.

Guillermo Blanco, appointed to lead the refinery division, was a captain who participated in Chavez's failed coup in the 1990s and went on to work in the Oil Ministry.

Maduro also created two new external board positions, tapping members of PDVSA's worker-led "strategic socialist plan."


Critics say PDVSA has grown increasingly political, mismanaged and corrupt since Chavez was elected in 1998.

The former lieutenant colonel purged PDVSA's ranks in response to a crippling strike in 2002-2003, firing thousands and replacing them with loyalists. Rafael Ramirez, the former oil czar, famously vowed the company would be "redder than red" and sent workers to state rallies.

He was replaced in 2014 by Del Pino, a low-profile technocrat, suggesting that depressed oil prices and operational problems were pushing PDVSA to adopt a more pragmatic stance.

But Del Pino has struggled to overhaul the company, crippled by Venezuela's strict currency controls that stymie imports and PDVSA's mandate to fund welfare programs.

PDVSA denies the mismanagement allegations, saying there is an international right-wing media campaign aimed at sullying its reputation.

The company says it drives social progress in Venezuela and that it is moving to clean up corruption that has long plagued the oil-rich country.

PDVSA did not respond to a request for comment about the leadership changes.

With Venezuela's economy in a tailspin, industry players worry that a more compliant PDVSA might increase cash transfers to the government.

"This change means more political control," an executive at a foreign company in Caracas said.

The shuffle comes after Maduro added Socialist Party allies to the central bank and economic vice presidency, which his political rivals say are also signs of consolidating power.

Story by Alexandra Ulmer; Writing by Alexandra Ulmer; Editing by Christian Plumb and Cynthia Osterman from Reuters

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