newswire.ca

HOUSTON, May 5 /CNW/ -- A group of more than 400 business executives and leaders in the financial, governmental and academic sectors participated in the conference "PDVSA, a Competitive and Sustainable Player in the International Energy Business," held by the Venezuelan oil corporation today in Houston.

The event was led by a high level Venezuelan delegation headed by Mr. Bernardo Alvarez, Ambassador from Venezuela to the United States; Mr. Luis Vierma, Deputy Minister of Hydrocarbons; Dr. Ali Rodriguez Araque, President of PDVSA; and Mr. Luis Marin, Director of PDVSA.

The host group offered details of the political, legal and financial situation of Venezuela and its oil industry.  The country's current production exceeds 3 million barrels daily and is expected to increase to around 5 million barrels daily by the year 2008, within the framework of a business portfolio that requires an investment of $43 billion during the next five years.  Of this amount, PDVSA will contribute 54 percent, while the remaining 46 percent will be covered by the domestic and international private sector.

"We are very satisfied by the large audience of important personalities of  the business and governmental sectors that responded to our invitation," emphasized Ambassador Alvarez.  "This confirms the interest and trust of the international community in the business opportunities offered by Venezuela and, specifically, our oil industry.  We took advantage of the occasion to reiterate our wish to strengthen the position of Venezuela as a commercial and energy partner of the United States and other countries."

In his turn, the Deputy Minister of Hydrocarbons, Mr. Luis Vierma, stated, "The continuing interest of international companies in investing in the Venezuelan oil and gas industry proves that the country offers an attractive and consistent legal framework.  The new Hydrocarbons Law allows the participation of private capital in upstream activities up to 49 percent, and up to 100 percent in the downstream hydrocarbon business, gas, charcoal, Orimulsion(R) and petrochemicals."

The President of PDVSA, Mr. Ali Rodriguez Araque, emphasized that "according to the best specialized information sources, oil demand will rise from 76 million barrels per day at the present time to 89 million barrels per day in 2010 and 103 million barrels per day between 2020 and 2030."  He also offered an overview of the recent crisis of the Venezuelan oil corporation, which was affected by a work stoppage unprecedented in its history.

"Despite this problem, PDVSA has proved such impressive recovery capability that today the production, refining and international trade operations are fully normalized," said Mr. Rodriguez Araque.  "This allowed us to cancel the force majeure statement in all sectors of our activity.  Now, our efforts are focused in consolidating these results, which demonstrate our success, while reviving our reputation as a safe, competitive and reliable supplier in the international energy market."

 CONTACT:
 Karen Allen (karenAvollmerpr.com )
 Alice Brink (alicevollmerpr.com )
 713-970-2100

-30- For further information: Karen Allen, karenA@vollmerpr.com , or Alice Brink, alice@vollmerpr.com , +1-713-970-2100 , both for PDVSA

<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:

1. The little experience that the people in charge of staffing have in these matters, and
2. 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 :

1. 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;
2. 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;
3. Allowing operational costs to increase and financial management to collapse;
4. Playing into the hands of international companies, and
5. 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

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, April 30, 2003 By: Jorge Marin

Date: Wed, 30 Apr 2003 13:58:59 -0400 From: Jorge Marin Jorge.Marin@pollak.com To: Editor@VHeadline.com Subject: PDVSA here to stay

Dear Editor: I have been reading Gustavo Coronel's commentaries for some time now. Many times, I have disagree and other times it has made me wonder whether he has a point. But his last editorial Explosions, anarchy and mercenaries in the new PDVSA goes beyond criticism, it is fanaticism of the worst kind.

The PDVSA that he once knew is gone, never to be return.

These people made an error of judgement when they decided to joint the strike last December. And by refusing to return to work, as ordered by Supreme Court, they in fact gave up their positions.

Their actions affected all Venezuelans and as such it should be punishable by law. That is why their leaders are flying to other lands to escape prosecution.

The people that took the reigns of this company are people with great conviction ... they are Venezuelans called out of retirement, and Venezuelans from foreign lands who have come to rescue PDVSA ... and by association the elected government. They did so while their lives were threatened, some had their cars riddled with bullets at their homes, some had daily demonstrations of fanatics outside their homes. And yet they overcame the sabotage of computer systems and equipment in order that the Venezuela's economy and democracy would not collapse.

The fact that production has reached the 2.8 million barrels a day in such a short time proved that they know what they are doing. They are all heroes in my book.

I am sorry that so many PDVSA employees lost their jobs. But it is ridiculous to think that the same people that committed sabotage be allowed to return to work. If they're truly skilled, I am sure they will eventually find work in the private sector, otherwise they were probably deadweight anyway.

I believe the facts that Kira Marquez Perez presents, as opposed to Gustavo Coronel's "facts" ... which are plain rhetoric.

Jorge Marin Jorge.Marin@pollak.com

<a href=www.lapress.org>Latinoamericapress.org-Indymedia Andrés Cañizález.  Apr 29, 2003

State oil company enters new era.

President Hugo Chávez has confirmed what everyone already expected: the overhaul of the state-owned Petroleos de Venezuela (PDVSA), Latin America’s biggest oil company. Chávez has no small task on his hands. He is dealing with Venezuela’s economic motor. "Black gold" accounts for 40 percent of the state income and 75 percent of exports.

The "top to bottom reorganization" announced by Chávez is the highest profile consequence of the Dec. 2002-Jan. 2003 "civic strike" declared by the Confederation of Workers of Venezuela (CTV), the country’s largest union, and the Federation of Chambers and Associations of Commerce and Production (FEDECAMARAS), as well as by opposition political parties and civil society organizations calling themselves the Democratic Coordinating Group (LP, Jan. 15, 2003).

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 28, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: An explosion in the Jose Petrochemical complex in eastern Venezuela produced several deaths and injured ... as a result, the MTBE plant which supplies the US market is totally and indefinitely paralyzed.

Another explosion at the Amuay refinery, in western Venezuela, has paralyzed the operations at this refinery for one week.

Oil spills in the "new" PDVSA are 50 times the number of oil spills taking place before the December strike.

The government is no longer talking about sabotage since it is increasingly obvious that the accidents and damage suffered to PDVSA plants and equipment of are the result of the incompetence of the improvised staff.

After more than 18,000 managers and technicians were fired over the radio and their names published, like criminals, in newspaper lists, the doors of PDVSA were opened, to let "revolutionary" workers replace the professional staff.

It's truly a miracle that no more accidents have taken place since ideological affinities are, today, the main and only requisites to get a "technical" or "managerial" job in the "new" PDVSA.

This was to be expected in a company which has a former terrorist, the so called 'Comandante Fausto,' aka Ali Rodriguez Araque as its president.

In parallel with these accidents there's increasing anarchy within the organization. The Marketing Division, in charge of selling oil and products internationally, is in the hands of a group of youngsters of doubtful transparency and great indiscipline. They are in open rebellion against the new manager, Nelson Reyes ... a retired employee pressed back into service, who lacks the required "revolutionary" credentials. Although Reyes was not involved in the strike, he does not have the trust of the radicals in the organization.

In the production division in eastern Venezuela there's organizational chaos due to the removal of Gilberto Zerpa, an engineer with great popularity among his colleagues.  Zerpa was named in his job by President Chavez but, a few days ago, Chavez himself fired him.

A company in which the President of the country employs and dismisses middle managers is bound to become a Mickey Mouse company in the short term. In fact, this short term is already here. The technical staff in eastern Venezuela are now up in arms (figuratively) against Chavez. As would be expected, PDVSA has been severely downgraded by the international community ... not so much due to the strike, but to the dismal performance of the new management and technical team.

While the "new" PDVSA is starting to rot from within, some international companies are sending mercenaries to do jobs for a company which is no longer the company they were doing business with.

• They know very well what is happening in PDVSA ... they know that the company is being dismantled and systematically destroyed in the name of a vague and undefined "revolution."
• They know that the corporate values they share are rapidly being disposed with in the "new" PDVSA.
• They know that the top officers of this PDVSA are the same persons that during the 1960´s were blowing up their installations all over the country. They know....

And yet, they're sending their people to help a crime to be committed ... they're not doing this because they need the money. They're too big and powerful for that!

They do not have any contractual obligations to do that because Technological Agreements signed by PDVSA with these companies in 1976 are no longer valid ... they faded away many years ago when INTEVEP, PDVSA's research company came into being.

What are they looking for?

Positioning, of course. But I say: What positioning will you have in two or three year's time, when a new government is in place and when PDVSA is back in the hands of its true managers? Positioning is a medium- to long-term proposition. but if you are betting on Chavez to be here until 2021 (as he claims), I can tell you that the odds are very much against you.

I recommend that you read Venezuelan history. If you do, you'll see that nationalization of the petroleum industry in our country was accelerated because of resentment created among democratic political leaders because of the cozy relationship some of you guys had with the Dictator Perez Jimenez.

The success of international oil companies in host countries has much to do with the empathy these companies develop with the country, rather than with the governments. If you bet on political horses rather than interpreting correctly the real mood of the country you are not going to be well positioned.

But, who am I to tell you this?

I am just an old petroleum hand while, surely, you have the technology, the know-how, the financial clout, the organizational might to be successful in any country ... be it Angola, Chad or Venezuela.

I just might mention that maximum benefits are usually less desirable than optimum benefits and that, after all, the heart of a big corporation ultimately has to be in the right place if it wants to come out on top.

You think Chavez is going to hand over the petroleum industry to you. There's no doubt that international petroleum companies should play an important role in the development and successful management of our oil resources ... I've always been in favor of an aggressive "aperture" (opening up) of our oil industry to private investment ... but this is not the way to do it.

It can not and should not be done by taking advantage of the political destruction of the real company by the lame duck and rogue government that is now offering you an opening.

Faust sold his soul to the devil and paid for all eternity.

Are you going to do business with this Commander Faust, who is at the threshold of political oblivion?

GIMME ME A BREAK...

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

Our editorial statement reads: VHeadline.com Venezuela is a wholly independent e-publication promoting democracy in its fullest expression and the inalienable right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference. We seek to shed light on nefarious practices and the corruption which for decades has strangled this South American nation's development and progress. Our declared editorial bias is pro-democracy and pro-Venezuela ... which some may wrongly interpret as anti-American. Roy S. Carson, Editor/Publisher Editor@VHeadline.com