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Caracas, Thursday July 01 , 2004  
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Changes are limited to discourse
Pdvsa: A ship adrift
Mariscal Sucre gas project, which was renamed, discussed and adjusted and, though, is now waiting for the signatures of the partners
The five men who have presided over the company in the last five years have announced numerous, and even radical, changes. However, very little has been done to implement plans like the improvement of the international business, the increase of local investment and the application the Organic Law of Hydrocarbons

MARIANNA PÁRRAGA
EL UNIVERSAL

Just as a ship without a rudder, the state-run oil firm Petróleos de Venezuela (Pdvsa) has gone adrift for a certain time. And it is not a simple consequence of the December 2002-January 2003 oil strike, which curbed production to 25,000 barrels per day. It is rather a combination of numerous deficiencies arisen years ago that have been more notorious with the policy change applied by this government.

Experts have insisted that in the last five years the discourse has gone from supporting the opening to private and foreign investment as a means to increase exploitation to a nationalist wave that has penetrated the industry under the conduction of the country's presidency.

"Pdvsa has seen no change in strategy. The ghost of Luis Giusti is still around," said Luis Pacheco, former planning director of the company, after evaluating the 2004-2009 business plan of Pdvsa, presented last April. Pacheco referred to the president of the company under President Rafael Caldera (1994-99).

He explained that production, development and local investment suffered no modification after the strike, although many of the plans had been announced years before and are still to be executed. The best example of this is the Mariscal Sucre gas project, which was renamed, discussed and adjusted and, though, is now waiting for the signatures of the partners.

In brief, the five men who have presided over the company in the last five years have announced numerous - and even radical - changes, including the current president Alí Rodríguez Araque and Energy Minister Rafael Ramírez.

However, very little has been done to implement plans like the improvement of the international business, the increase of local investment and the application the Organic Law of Hydrocarbons. Other decisions have been objected even by government supporters.

What was forgotten
Experts - both supporting the government and opposing it - agree that the reduction in the operations of firm Bitúmenes del Orinoco and its impact on the Orimulsión business was one of the worst strategic decisions ever made by the current management of Pdvsa.

After months of silence, the company made it public in August 2003 and the international contracts have been frozen ever since, with the subsequent lawsuits - Canada's New Brunswick Power is demanding Pdvsa to pay $2 billion -and the loss of the firm's image as a dependable provider for the electricity industry.

Other Pdvsa subsidiaries that have been disintegrated include Carbozulia, a producer of coal; the International Center for Education and Development (CIED), which trained workers of Pdvsa and the rest of the industry, and Intesa, which is now in litigation with its partner SAIC and has been replaced by a management department in Pdvsa.

The new organizational structure of Pdvsa, announced in March after the end of the strike, does not include Bariven, the branch in charge of procurement. Palmaven also disappeared, while PDV Marina was considered "a separate company," as the energy minister put it.

And finally, the gasoline distribution business is still in place but suffering. While Pdvsa is working in the merger of Deltaven and Distribución Venezuela, gas stations all over the country lose steam as the profit margins have not been adjusted since 2002.

Greek figures
The creation of the so-called Special Development Fund with $2 billion coming from the extra revenues of Pdvsa have been at the center of the activity of the company lately. But it was hardly hit by the dismissal of a large part of the personnel during the strike and the collapse of computer systems, including SAP, which went from 11,000 to barely 500 users, according to unofficial data.

Beside these $2 billion, Pdvsa has budgeted $600 million for agriculture and $500 million for infrastructure through trusts controlled by the Development Bank of Venezuela (Bandes) and the Venezuelan Petroleum Corporation (CVP). It also includes $616 million for social development.

As Pdvsa gloats over its "new social mission" and the exceeding income is at $4,850 so far 2004 (as a result of the increase in oil prices from $20 to $30.40 per barrel), Pdvsa has announced no plan to reinvest these funds.

In exchange, doubts about the financial performance of the firm, which has been delaying its 2003 report to the U.S. Securities and Exchange Commission. The deadline is the end of June.

Translated by Edgardo Malaver



 
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