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May 16, 2006
Venezuela's Toy Oil Company
The Houston Chronicle's comprehensive examination of the manner in which the Venezuelan national oil company, PetrĂ³leos de Venezuela (PDVSA), is managed under the Chavez regime is eye-opening. In a world where energy supplies are tight, this article is a vivid illustration of the foolishness which occurs when authoritarians like Chavez control oil production:
Touring a branch office in central Venezuela, an executive from the state-run oil company worked himself into a lather.
Why? Because there weren't enough portraits of President Hugo Chavez hanging in the building.
"I want a nice, big photo of the president in the main entrance," he barked at a press officer. "And that's an order." . . .
. . . During the nine-week national strike that tried to force Chavez from office in 2003, the president fired 19,000 oil workers for joining the work stoppage. The strike failed, mainly because key PDVSA supervisors remained on the job, including Salazar.
Chavez then packed PDVSA with loyalists.
"We are the new Venezuelan heroes," said Armando Lopez, who helps runs an offshore platform that loads oil tankers at Venezuela's port of Jose.
Today, some PDVSA workers wear Lance Armstrong-style wristbands with the phrase "Bolivarian Revolution," a reference to the Chavez movement named for Simon Bolivar, the 19th-century South American liberator.
Even pipelines carry pro-Chavez graffiti.
But political fervor sometimes seems to outstrip technical know-how, said Victor Poleo, a Caracas oil analyst.
PDVSA workers used to average about 15 years on the job, but since the strike, that number has dropped to about four years. A recent report in the Caracas daily El Nacional said that nine PDVSA workers had been killed in fires and explosions at refineries over the past six months, an unprecedented number, Poleo said.
"This country lives on oil, but its best people are gone," Poleo said.
That could spell trouble for the new joint ventures because PDVSA, rather than private companies, will manage the operations. The company plans to ramp up production to 5.8 million barrels per day by 2012. But since the pre-strike days of 2002, daily production has dropped from 3.3 million barrels to 2.6 million. . . .
According to this story, PDVSA had 46,000 employees at the time of the strike. Can you imagine the internal chaos created by firing 40% of your employees in a company that size?
We are assured on PDVSA's website that the company will achieve production of more than 5.8 million barrels a day by 2012. Maybe a few more slogans on the pipelines are all that's necessary.
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