Venezuela Says Oil Industry to Rebound Soon From Strike

www.nytimes.com By JUAN FORERO

BOGOTÁ, Colombia, Feb. 17 — The state-owned oil company in Venezuela, though hobbled by a faltering 78-day strike by oil workers, could be producing 2.8 million barrels per day within a month, Venezuela's quota as set by the Organization of the Petroleum Exporting Countries, the president of the company said today. Advertisement

Reaching 2.8 million barrels per day would be a milestone for the state-owned company, Petróleos de Venezuela, once the world's second-largest oil company and a major supplier of petroleum to the United States. The company used to produce 3.1 million barrels a day until an antigovernment strike paralyzed production, devastating Venezuela's economy and severely testing the leftist government of President Hugo Chávez.

The announcement by Alí Rodríguez, president of the company, was quickly challenged by dissident oil executives who on Dec. 2 led a walkout of thousands of workers that continues to this day. The walkout was part of a nationwide general action, but the strike in the other sectors fizzled out earlier this month.

The government and the opposition agreed today to an eight-point resolution to reduce tensions, the first development in three months of talks guided by the Organization of American States, Reuters reported, quoting a source close to the talks as saying, however, that a deal to end the conflict seemed no closer.

The striking oil executives say that production stands at 1.4 million barrels per day, and that reaching 2.8 million per day will take many more months because Petróleos de Venezuela lacks the managers and technicians to reactivate the industry quickly and properly. Mr. Chávez has fired nearly 13,000 striking workers, many of them senior executives and highly trained engineers.

"Without these people what will Pdvsa do?" José Toro Hardy, an oil analyst and former company board member, said in a recent interview, using the name by which the company is widely known. "Instead of producing 3.1 million, it could produce 1.5 to 1.8 million."

Indeed, oil analysts outside Venezuela say Petróleos de Venezuela would probably never again be the same giant it once was because it has been so hobbled by the loss of qualified workers, the damage to its reputation caused by the strike and financial losses estimated at $3 billion.

But Mr. Chávez's government has touted its efforts to restart the oil industry, saying the company is now producing more than two million barrels each day as blue collar workers returned to their jobs. Today, Mr. Rodríguez also announced that the company would soon be meeting domestic demand for gasoline.

Mr. Rodríguez, and other managers at Petróleos de Venezuela, are going through with a restructuring of the company that they say will see it split in two. The plan is to cut jobs and streamline operations, which has prompted speculation that the company's refineries in the United States could be sold.

Today, Mr. Rodríguez denied that the government was considering selling those refineries, operated by Citgo, but he did say that Petróleos de Venezuela was reviewing all of its worldwide assets to determine if any should be sold. "At the moment, we are in the process of a review of all of Pdvsa's businesses, domestic and international," he said. "Once that review has been completed, once we have a new business plan set out, which is being drawn up, then we will make the decisions about businesses at home and abroad."

How Venezuelan Outlasted His Foes  (February 7, 2003)  $ World Briefing | Americas: Venezuela: Chávez Rejects Early Election