May 16th., 2005

The Problem of PDVSA

Summary

• Chávez insists the U. S. attempts to overthrow him.

• PDVSA has shrunk its daily output in 800,000 barrels.

• Exploration and maintenance activities are paralyzed.

• Serious mistakes in management of wells, extraction operations and refineries.

• These are consequences of declaring PDVSA a tool of the revolution.

• Serious irregularities in crude trading.

• Multimillionaire commissions for pro-Chávez military and politicians.

• The Miami Herald challenge.

• A struggle for the business of an oil giant beyond control.

• Chávez claims that discord and rumors are being sowed in The Armed Forces.

• Warnings by Chávez and internal conflicts in Chavismo.

• “I won’t deal with anymore traitors.”

• In Brasilia, he declared himself to be Nasserist.

• He rejected Iraq’s invasion with ire; he asked for its condemnation and ended up by recognizing the present Iraqi Government.

• Chávez speaks his mind; does what he can and does not hide what he proposes to do.

• For Lula, a new trade geography is born and for Chávez, a new international geopolitics has been launched.

• Chávez’s ideological mentor.

Last November, when the strategic map for the New Phase was designed, Chávez said that the Revolution had weaknesses and threats.  In Aló Presidente (15 Sunday), he charged that he faces a triple front attack:  vs. PVDSA prestige; sowing of discontent amidst The Armed Forces and fanning conflict among his followers.  He used the broadcast to offer his viewpoints on the above.

Regarding what Chávez has said:  in 1998, PDVSA’s output surpassed 3.1 million barrels daily.  Today, Venezuela’s total oil output is 2.6 million, of which 1.5 million come from PDVSA and the rest -1.1 million- are supplied by transnationals, through the operational accords and The Orinoco Strip Associations.  The official goal for this year is 3.2 million which is impossible to reach.  Associations of engineers; oilmen; geologists; geodesists and geophysicists offered a joint report showing that real output has shrunk in over 800,000 daily barrels when compared with official figures.  The report warns about the future of the enterprise due to the near complete stoppage of exploration and maintenance activities, as a result of the layoff of 20,000 technicians and specialized workers and the financial constraints imposed for political use of PDVSA assets.

According to the Energy Ministry, the cost per barrel has risen from 3 to 7 dollars.  Frequently, serious failures are detected in the management of wells and other extraction activities, as well as in refineries, which have been temporarily shutdown with heavy losses.  Sabotage is talked about but the real source is the replacement of technicians by unqualified workforce.

Making PDVSA a tool of the Revolution and centering decisions of the Ministry of Energy in Rafael Ramírez, PDVSA President –a Chávez yes-man-, wiped out control mechanisms which should be applied by a Ministry –of indispensable technical nature- whose management cannot be but professional.  Thus, the controversy on levels of output, payment of royalties, hard currency deposits in The Central Bank, the Ministry of Exchange with Cuba and, generally, the lack of transparency with a bearing on the enterprise so sensitive for the whole country.

Marketing is the most challenged dimension.  Chavez was outraged when El Nacional  reported that Internet had information on the sale of Venezuelan crude at a discount price.  As evidence, the daily published new evidence supporting the veracity of the issue.  Last April, The Miami Herald published three reports with data, figures, names and other references of irregular dealings in the marketing of Venezuelan crude and the multimillionaire commissions of pro-Chávez politicians and military, including, Asdrúbal Chávez, one of his relatives, who is Marketing  Manager in PDVSA.  The Government said that The Miami Herald. Would be charged with defamation:  a month has gone by and charges are not processed.  The grapevine says there will not be any as the newspaper is able to show evidence of the truth of the information.

The other side of PDVSA’s politization is the internal conflict among Chavista factions.  Players filter their own versions to the media.  There is a struggle for enterprise control between military and civilian staff and among both Chavista parties.  It is a fight over juicy businesses in an oil giant out of control.  Collaterally, management disorder is nourished, to the point that for two years, operational and financial results were not  shown, duly audited, among other requirements of The Security and Exchange Commission (SEC), with the serious consequences these omissions bring about.

NOISE OF SWORDS AND INTERNAL CONFLICTS

The noise of swords originate in the President himself.  He said he was canceling the military exchange with the U. S. because members of The Mission were luring Venezuelan officers into conspiracy.  In his Aló Presidente, he said that within the Armed Forces discontent and rumors are being sowed because “a chaos is being sought.”  Besides what the President has said, something odd took place.  While Chávez was in Brazil, the Ministry of Defense announced that members of The High Navy Command had retired.  Upon returning home, his Minister of Defense stated that the information was mistaken.  The lack of explanation nourish street rumors, on an alleged military uneasiness on the creation of a paramilitary force with thousands of reservists who are being trained to face the invasion of U. S. troops.  There is also talk of officers malaise on the tone of the accords of  binational integration with Cuba.  The grapevine says that Chávez will confer the rank of Chief General of The Venezuelan Armed Forces to Fidel Castro.

Regarding the internal problems of the Revolution, he voiced in the same program, that these nauseated him.  He repeated a phrase he had not spoken for years:   “I'm not committed to any party.”  Some of those present frowned and gazed at each other.  Chávez is the President of Movimiento Quinta República (MVR) Party.  Minutes later, there was awe when he said that in the next presidential elections he could face “a candidate within our own ranks.”   Whom was he alluding to?  Frequently, Chávez resorts to extravagant statements to set the agenda of political discussion.  Now, out of his intricate oratory a missile aimed at his own ranks was shot, with a harsh admonition:  “I do not accept anymore traitors.”  The interpretation of Chávez’s rhetoric is a difficult apprenticeship, both in Venezuela and abroad.

CHÁVEZ’S CODE

In every foreign gathering he attends, his rhetoric calls attention.  At the recent America Summit of Southern Arab Countries, he ended his presentation by declaring himself a Nasserist while quoting the Egyptian leader.  A witness to his irresistible temptation for mimetism:  to say what he believes will please his audiences.  On his visits to different countries, he would call himself and admirer or disciple of some great leader.  In such terms he spoke of Lenin; Mao; Gandhi;  Ayatollah Khomeini; Gaddafi; Allende and Perón, to mention those most referred to.

In Brasilia, he wrathfully rejected the invasion of Iraq and requested its categorical rejection in The Final Declaration.  In the development of the Forum, Chávez became aware of his isolation and ended up joining the consensus on Iraq’s transition.  Notwithstanding, he went on telling reporters of the criminal occupation in Iraq and labeling its government as a marionette of the U. S.  Ambivalence between discourse and action?

The judgment of Chávez ought to be done taking into account what he does, not what he says:  this was Ambassador John Maisto’s recommendation to his government, when the recently elected President began to call international attention due to his controversial speeches.  Maisto’s advise was a heavy factor in guiding the treatment of Chávez.  Experience has introduced a variable in Maisto’s view, now accepted by its author:  Chávez says what he thinks, does what he can and does not hide what he intends to do.  In Brasilia, he spoke his mind on Iraq, he recognized its recently-elected government (not to be left out).  He went on saying that the U. S. is guilty of genocide in Iraq.

Lula and Chávez gave different readings of The Summit:  for Lula, a new market geography was born; for Chávez, a new international geopolitics was launched.  For Lula, the last World Social Forum was a gathering of alternative reflection vs. liberalism.  For Chávez, it was the project of a planetary political movement vs. globalization and imperialism.

Socialism XXI Century is the alternative he proposes.  Upon designing The Ten Point Objectives for The New Phase, he confessed these echoed an effort elaborated with the support of friends.  Among these –besides the Cubans- guided by Fidel Castro, there is the Hungarian Islván Mészaros, author of the bestseller Más allá del capital (Beyond Capital) :  Communism was prematurely buried and time has come to bring it back.  The slogan of The World Social Forum –“Another World is Possible”- belongs to him.  An analysis of Martha Harnecker text shows actions in-the making of what Chávez said:  attempted realizations facing difficulties and verbal insistence, at home and abroad, on what is the thought matrix, namely, the authentic Chávez Code.