As PDVSA agonizes... the power struggle intensifies
<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, May 05, 2003 By: Gustavo Coronel
VHeadline.com commentarist Gustavo Coronel writes: The dismissal of more than 18,000 managers, technicians, modest-ranked workers and secretaries from Petroleos de Venezuela (PDVSA) has seriously impaired the capacity of the company to function at the required levels of efficiency.
In previous commentaries, I have said that staff replacements being implemented, mostly lack the minimum requirements to do an adequate job. The main reasons for this languid approach to staffing in the new PDVSA seem to be:
- The little experience that the people in charge of staffing have in these matters, and
- The fact that top management is increasingly failing their supervisory duties due to the fierce struggle for power going on within PDVSA for the last six months or so.
The first reason is certainly serious, but not fatal, if it can be corrected in the short term. It has to do with the abundant influx of inept employees into PDVSA, who feel that an international oil company can be run by ideological comrades. These people have no idea of the complexities involved in exploring, producing, refining and selling hydrocarbons on the international market, in intense competition with Exxon, Shell and other giants.
For this new breed of employees, the limits of PDVSA seem to be national borders, as they feel that the local market is the most important task at hand. These new people have rarely been exposed to the international environment. They tend to speak other languages, when they do, patriotically bad. They tend to imitate President Chavez, who speaks a Tarzan-like English (in half-mockery) on his frequent trips abroad.
The second reason is much more tragic, and jeopardizes the very life of the organization. The incompetence of the lesser-ranked can be solved as soon as a new government comes into place. When this happens, the current group of revolutionaries in bureaucratic positions within PDVSA will have to go back to whatever they were doing before.
What is really destroying the company is the struggle for power within the organization. This is happening before the eyes of the President of the country who does not seem to care, is probably impotent to do something about it or is promoting it in order to keep control.
PDVSA reminds us of the African scenes one sees on the Discovery Channel ... those scenes in which the carcass of a gazelle is being torn to bits by lions and hyenas, while vultures circle above, in patient wait.
There are at least four groups vying for supremacy in PDVSA.
The first is controlled by Ali Rodriguez. This group, apparently, has total control ... by means of a Presidential order which gave Rodriguez dictatorial powers to rule the company. In addition Rodriguez has in his pockets both Alvaro Silva at OPEC and Bernardo Alvarez (the Venezuelan Ambassador in Washington) while it generally receives political support from PPT, one of the government parties. But this control of Rodriguez is starting to crumble as he is being accused by government rivals of :
- Eroding the credibility of PDVSA in the international community as nobody knows any longer how much oil is being produced, being refined or being sold. President Chavez, for example, says at one moment that production is 3 million barrels a day and 2 hours later he claims is 3.3 million barrels of day. In fact not one of these two figures is the right one;
- creating operational chaos ... the fires in the refineries, the explosions, the oil spills, the lack of discipline in the ranks, have never been seen before in the history of the company;
- Allowing operational costs to increase and financial management to collapse;
- Playing into the hands of international companies, and
- Improvising a re-structuring of the company which is actually deepening the crisis of the organization.
The group accusing Rodriguez of these misdeeds is led by current Minister Rafael Ramirez ... it is a fundamentalist group which includes Marxist radicals and remnants of the fascist organization FUNDAPATRIA ... once led by Luis Vallenilla, one of Chavez financial supporters and currently in disgrace after the scandals of CAVENDES, his failed investment bank. This group advocates a "popular" rule for PDVSA, whatever that means.
A third group, led by resurrected Planning Minister Jorge Giordani, includes Hector Ciavaldini (ejected by Chavez from the presidency of PDVSA), former Vice President and former Trade Minister Adina Bastidas and those members of MVR on the Board of PDVSA.
Still a fourth group is made up of the military elements within PDVSA, which controls one seat on the Board and the Industrial Protection Division ... which is only a pretense for spying other members of the organization. This group has the support of the Tupamaros urban terrorist organization which has taken the street adjacent to PDVSA headquarters and erected barricades all around ... just like in the times of the French Revolution.
One has to ask: Is this the way to run an international company that pretends to compete in the world market with well managed companies, in order to bring back home the money the country needs for its normal development?
My answer is no! The company, immersed in this nightmarish fight for political control among rival factions, is no longer the PDVSA we knew. This is a travesty. This is why I say that such a PDVSA can not be seen as legitimate.
As I see that my good friend Daniel Burnett has just written something along these lines I will read it with pleasure and possibly comment on it in the near future.
The tragedy of PDVSA is not only a Venezuelan tragedy ... although we are the ones who will suffer its effects most directly. It is a truly international tragedy ... similar to the bombing of Guernica by the Nazis, to the destruction of the Buddhas in Afghanistan and to the sacking of the archeological treasures of the Iraqi museums.
It was our only First World company and ... as such ... it had to be dragged down, by the barbarians, to the levels of surrounding mediocrity.
Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983. In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort. You may contact Gustavo Coronel at email gustavo@vheadline.com