June 16 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuelan Energy and Mines Minister Rafael Ramirez said 18,000 oil workers fired by the government during a two-month strike won't get their jobs back even though a court ruled last week that their dismissals were illegal.

Ramirez said in a television interview that the government would take all necessary legal steps to overturn the ruling by the first consultative court.

``We will never permit these persons, who were capable of paralyzing the oil industry and committing acts of sabotage that left losses of more than $7 billion, to return to head operations in the oil industry,'' Ramirez said.

Ramirez' comments suggests many of the striking oil workers will never come up for reinstatement, raising doubt whether state- oil company Petroleos de Venezuela SA will be able to sustain production at currency levels. Analysts have said the company needs its former employees to maintain and repair many of its wells and facilities or face declining output.

The court ruled last week that the government couldn't fire workers as they belonged to the Unapetrol union and were protected by the country's labor laws.

The decisions of the first court are always open to appeal,'' Ramirez said. We are already starting legal steps.''

Venezuela is currently producing about 3.2 million barrels a day, including 100,000 barrels a day of a fuel substitute and 150,000 barrels of condensates, Ramirez said.

The strike in December and January, which cut oil production by as much as 95 percent, cost the economy $7.4 billion. Labor unions, business leaders and former oil executives organized the national work stoppage to pressure President Hugo Chavez to step down and hold elections.

Venezuela may hold a binding referendum later this year on Chavez's rule.

06/16/2003 - Source: <a href=www.latintrade.com>BNamericas-LatinTrade Venezuela's state oil company PDVSA will soon start to award oil field maintenance contracts to reverse declining production at its oil fields, industry sources told BNamericas. "One thing that has suffered a lot since they downsized significantly has been the quality of operational maintenance," one source said, asking not to be named. "That is very worrisome for PDVSA." "Maintenance levels are not at the same levels as before the strike," said a different source, Fernando Delgado, executive director of the Zulia state branch of Venezuela's national oil chamber. PDVSA is considering awarding contracts to joint ventures of Venezuelan and foreign companies, Delgado said, adding "this would be good for the country, and reactivate the sector with private capital." Awarding these contracts to private companies would not necessarily mean privatizing the operations of state oil fields, "but we could start with maintenance contracts on small fields and then move to larger fields," the first source said. "PDVSA is not going to give everything away, but just a part," the source said, adding, "It seems this idea has been received well by PDVSA management." Delgado said construction companies in the west of the country, where PDVSA is the main client, have been operating at 20% of capacity since the end of the oil strike in February. "Activity is considerably less than it was," he said. "PDVSA officials say it's because before the strike they were spending too much money on maintenance contracts, but it's impossible for me to check that," Delgado added. For now the lower levels of maintenance have not resulted in any serious accidents, such as oil spills or gas explosions, Delgado continued, adding that if maintenance does not improve such accidents will become more likely in the future. PDVSA faces an "emergency" in declining oil production, the source said, adding "The reality is that there are almost two worlds, because the expectation is that there has been recovery since the strike, but in the last week and a half we're starting to hear that production is rapidly declining." "There is a perception that production is heavily declining now. That reality is sinking in and they are having serious problems with maintenance which in turn impacts production," the source continued. Another reason for declining production could be that PDVSA overproduced some good prospects after the strike, "but that's always a bad industry practice because when you overproduce you will never reach optimum economic recovery," the source said. However, the oil chamber's Delgado said that there is a natural 20% annual decline in oil fields and poor maintenance now will affect future production, not current production. PDVSA chairman Ali Rodriguez said on Wednesday that the company is currently producing at its OPEC quota of about 2.9 million barrels of oil a day. "The official numbers are pretty good," Delgado said, adding that current production is within 100,000b/d of pre-strike levels. Because half the workforce was sacked during and after the two-month strike at the beginning of the year, PDVSA has appointed political allies or lower level employees loyal to President Hugo Chavez, the source said. "Some people believe the problems are here to stay because they have cut the company so thin in terms of employees and personnel that it will be hard to handle a company this size with a 45% cut in the payroll and believe that everything's going to fine and dandy," the source continued.

<a href=www.vheadline.com>Venezuela's Elecronic News Posted: Sunday, June 01, 2003 By: Oliver L. Campbell

VHeadline.com commentarist Oliver L. Campbell writes: It was good news to hear doctor Ali Rodriguez agreed to take back some 900 ex-PDVSA employees on the payroll.

I trust they are well qualified, with sound experience and include two or three capable accountants who can finish the preparation of the company’s 2002 accounts. These should have been ready for consideration and approval by the PDVSA Board by 31 March.

The strike delayed the work but ... five months after the year-end ... the accounts should really be ready.

I understand they're unlikely to be finished before July, and this does not reflect well on a company of the size and prestige of PDVSA. If the latter were a private company, the shareholders would have made a great fuss and the Finance Director would have probably resigned.

However, PDVSA’s shareholders ... ultimately all Venezuelan citizens as represented by the Minister for Energy and Mines ... are less demanding and unlikely to make any commotion. This is a pity because we should all take an active interest in knowing how well the company did financially in 2002 or, indeed, in any year.

• After all, PDVSA’s financial results impinge on the whole economy and so affect the individual citizen.

I have said before, that the principles for consolidating the accounts with subsidiaries are simple enough in theory but, when it comes to the practice, PDVSA’S accounts are complicated and require the service of some good accountants.

What is more, the latter must rely on their own expertise since it's unlikely their new bosses will know the first thing about USA accounting standards as set out in the numerous statements issued by the Financial Accounting Standards Board (FASB).

Although the books are kept in bolivares, the accounts are presented in US dollars, which creates a further complication. My plea to doctor Ali Rodriguez is to take back those competent accountants who know about consolidated accounts and are familiar with FASB standards.

PDVSA has successfully restored oil production; now is the time to restore financial credibility.

My second point follows on from the above. May I make a plug for the Annual Report (Informe Anual) which PDVSA produces both in Spanish and English versions. This document starts with the President’s Message and is followed by an excellent commentary on the company’s operations during the previous year. The company’s consolidated accounts appear at the end of the report. The sad fact is few Venezuelans read it, but I believe it should be read by all those who have the interest of their premier company at heart.

People who criticize PDVSA may not always have the full facts.

Certainly by reading the Annual Report they will be better informed about the company’s operations, and also become aware of its many achievements.

In my time at the company, the Report used to appear at the end of May, but in recent years it has not been published till October. By that time, people have forgotten all about the previous year and are only interested in events of the current year.

That is why it is important for the “shareholders,” the Venezuelan people, that the Report comes out again no later than the end of May.

Three years ago I prepared, and sent to PDVSA, a detailed timetable which would achieve this ... they thanked me, but I suspect it was shelved (engavetado) or binned.

Administratively, it is not difficult to meet the target, if you use the carrot and stick approach ... you make one person responsible for the Report and tell him he'll get a bonus if he makes the deadline, but will receive no salary increase if he does not.

The latter will concentrate the mind wonderfully!

A few years ago, PDVSA decided to publish the Report with a black cover, front and back, with just its name and “Annual Report” on the front. Somebody obviously thought this projected PDVSA as a serious company. It entirely missed the point that the Report is a PR document par excellence, intended to attract and inform readers while allowing the company occasionally to pat itself on the back.

Thankfully, they have gone back to placing an impressive photograph on the front cover ... the version in English has readers abroad among those interested in oil matters or the Venezuelan economy.

To summarize my pitch, I strongly feel PDVSA should make much more of its Annual Report and ensure it reaches many more “shareholders” in Venezuela.

The document should aim to foster a closer rapport between Venezuela’s premier company and its citizens.

• At present, few people know the Report exists let alone read it.

So, please get the Report out earlier, distribute it more widely, give it better press coverage, and let us all know how well the company is doing.

The “shareholders” deserve no less.

Oliver L Campbell, MBA, DipM, FCCA, ACMA, MCIM  was born in El Callao in 1931 where his father worked in the gold mining industry.  He spent the WWII years in England, returning to Venezuela in 1953 to work with Shell de Venezuela (CSV), later as Finance Coordinator at Petroleos de Venezuela (PDVSA).  In 1982 he returned to the UK with his family and retired early in 2002.  Campbell returns frequently to Venezuela and maintains an active interest in political affairs: "I am most passionate about changing the education system so that those who are not academically inclined can have the chance to learn a useful skill ... the main goal, of course, is to allow many of the poor to get well paid jobs as artisans and technicians."  You may contact Oliver L Campbell at email: oliver@lbcampbell.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, June 01, 2003 By: Patrick J. O'Donoghue

National Assembly (AN) Social Development Committee president, Angel Rodriguez has accused Petroleos de Venezuela (PDVSA) East director, Luis Marin of allowing 300-400 dismissed managers to return to work and rescinding contracts of 56 employees that undertook contingency plans during the national stoppage at San Tome plant in Monagas. 

Last week, a dozen workers initiated a hunger strike outside PDVSA HQ in Caracas and the Energy & Mines (MEM) Ministry  to protest current policy ... previously, the group had staged protests at San Tome and other eastern Venezuelan plants. 

• Rodriguez claims that coupster sectors have been regrouping inside PDVSA and easing out people, who reactivated the industry during the stoppage. 

To prove his claim, Rodriguez produced a video of PDVSA employees in an anti-government protest in December singly out people who had been reinstated ... "workers recognized them and protested forcing the administration to transfer the reinstated to Barinas."

Rodriguez mentions Javier Aranaga, who allegedly was local stoppage spokesman, Juan Bravo, Luis Guilarte, Giovanny Cova and Edson Avila and asks why was Rafael Rios dismissed when he was responsible for guaranteeing the supply of Merey crude to the Puerto La Cruz refinery. 

PDVSA-East has also renewed contracts with 9 contracting companies that adhered to the stoppage: Veracer, Rmyca, Veraica, Cafrica, Conigar, Roysso, Halcon, Yelemo and Fili.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, May 20, 2003 By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes: I recently received many positive feedback letters from Venezuelans who have lived and/or observed the negative effects of the opposition-backed stoppage (December 2002úJanuary 2003) and its devastating consequences, including the stoppage and sabotage of PDVSA by ex-PDVSA employees.

The following is part of the text from one of these letters. It is being used with permission. All names and direct references have been excluded or modified in order to protect the people involved from receiving threats from anti-Chavez, pro-opposition or ex-PDVSA supporters.

Oscar, this is what I know: This friend of my family found a job in PDVSA-Caracas a few years ago. He had no money whatsoever. In fact, he lived with my family in Caracas because he didn't have a place in Caracas. As soon as he got a job in PDVSA, he rented an apartment in Caracas in the east part. (Note: the east part of Caracas is often considered a “ritzy area”). The company paid 50% of his rent (I wish , here where I am, that I could find a job that pays 50% of my rent!). Then, he got a credit from PDVSA to get a car with a very low interest rate. The company was paying a private tutor for him to learn English! They were going to send him to the USA to do a masters in the oil industry.

When he got married, he and his spouse enjoyed their honeymoon in Europe. Something that they would not have done not even in dreams if he was not working in PDVSA. When the strike came, he was outside protesting.

Over December, he went to Margarita and my mother asked him "What are you doing there? ...you should be working!" and he replied that he was in Margarita while the strike was taking place. I actually don’t know how long he was in Margarita, but I know it was over 3 weeks. He was fired and was so mad! But check this out. His boss, never went on strike and he is still at his post. This friend of ours was a normal engineer. He was not an executive and look at all the benefits he got. He deserved to be fired for hurting my country!

My uncle: He works in one of the PDVSA subsidiaries. He has been there for the last 25+ years. When the strike started he was on vacation in another part of Venezuela (he does not go anywhere outside the country). Well, he came back out of his vacation because he heard about all the stuff that was happening. When he got back to work, he cried because all the disaster the strikers had done to the equipment. He told my mother that all those people should be in jail because they destroyed millions of dollars in equipment that the company acquired with years of work. When he got back to work, somebody (I don’t know if it was a manager who was part of the strike) asked him if he was "chavista.". My uncle replied saying that he was Venezuelan and for that reason he had to go back to work.

My other uncle: This uncle worked as a Public Relations general manager in PDVSA for over 15 years. He left PDVSA a few years ago. You have no idea how much money he and his friends (who worked for the company had). Everyone had new cars, trips to Europe, shopping in Margarita, their children going to private universities, enjoying parties in their house with lots of food and alcohol. They all had boats to go to the beach, etc. In fact, my uncle bought 2 apartments while working in PDVSA. When we would go visit, the whole family (10+ people) would go to expensive restaurants and all of it was paid by PDVSA.

I know an ex-PDVSA employee who bought an apartment in the same apartments where Giusti and family have one. The same with other saints of the company. Giusti would fly his family in the PDVSA airplanes to Margarita and Miami. God, I could go on and on about everything I saw! One cannot say that all those people who were fired were indispensable!

Give me a break! I tell you ... I could do the job that 5 people would do in PDVSA-Caracas. None of them should be able to get back to work in PDVSA and I hope none of them work ever in an oil company. After the destruction that they caused to Venezuela and the oil industry NONE of them should be thought as good workers.

Why didn’t the pro-opposition people talk against PDVSA while all those workers enjoyed those incredible benefits that not even in the best companies in the USA a normal worker would enjoy?

As soon as I find out more I will let you know (right now there is a manager in one of the PDVSA refineries who was fired because he didn’t let a new manager come into the installations). According to what we know, he was mad by the fact that his previous boss was fired and the new person was appointed by PDVSA-Caracas. The new manager had to take a helicopter to get inside the building because the person closed the main doors. The incredible thing is that this fired manager was a supporter of the President and never went on strike. I will see what I find out.

Regards xxxxxx xxxxxxxx xxxxxxxxx

The above is a first-hand account of some of the things that can be associated with some (many or most?) ex-PDVSA employees that have been fired for supporting the anti-Chavez and opposition movements through their sabotage of the PDVSA installations and for “not showing up for work.”

Meritocracia? Professional? Civilized? Democratic? The opposition says, “PDVSA belongs to all Venezuelans.” Hummm. Who are “all” Venezuelans? No wonder these ex-PDVSA people are so angry at the fact that they have been fired!

Some people ask: “Where did the money go?” Hummm … Let’s see, 18,000 x US$10,000 (benefits?) = US$180,000,000 … and 10k is probably a very conservative figure ... apartments in ritzy areas are not inexpensive ... university education in the USA is extremely expensive ... restaurant tabs in Las Mercedes are exorbitant ... vacations in Europe are barely affordable by most average Canadians, let alone average Venezuelans.  Vacations at resorts in Margarita or Los Roques are relatively expensive as well.

If these benefits are paid out yearly, in 6 years it would amount to over US$1 billion. I wonder where the money went?

Meanwhile, the average Venezuelan works for as little as US$120 monthly … not even enough to survive. Many of the average Venezuelans that work as maids earn less (and most non-poor Venezuelans have maids). Many average Venezuelans must work 6-7 days per week just to survive, let alone go on vacation or go study in the USA. Let alone, hire a maid.

Oscar Heck oscar@vheadline.com

Note: I met a person in Merida in January 2003 that was a strong anti-Chavez pro-opposition supporter. One day he came to have a coffee at his regular eatery (where I also ate and drank coffee). He was very upset and was talking loudly so that everyone could hear him. He said something to this effect, “I went to a party at my brother-in-law’s house on the hill about 3 weeks ago. It was a BBQ evening with a whole pig being roasted and lots of beer and scotch. My brother-in-law has been working for PDVSA for 11 years. He is an engineer. He has a huge house and fancy cars but I never paid attention to that before, not until that night. He got really drunk and said that when he left PDVSA in support of “El Paro” (The Stoppage), he broke 5 pipes and stole the keys to one of the main control panels. I was disgusted and left the party. Today I am a full-fledged Chavista. I never believed what VTV (the government TV station) was saying about sabotage at PDVSA. I though it was all invented by the government. But now I know it is true. My brother-in-law received a notice yesterday that he is fired. I am glad. Tonight I am going to take the bus to the “23 de enero” celebration in Caracas…”