Posted on 03/20/2002 11:13:28 AM PST by Cincinatus' Wife
CARACAS, Venezuela, March 18 - Petróleos de Venezuela S.A. may be state owned, but it is known internationally as efficient and well managed, even cutting edge. The company, one of the world's largest oil producers, has also long attracted the brightest minds in Venezuela to its singular task: producing the huge amounts of oil that motor this country.
Now, however, the behemoth, with $20 billion a year in oil sales and 40,000 employees, is in turmoil.
Its white-collar workers are locked in a bitter feud with the government of President Hugo Chávez, whose firing of the company president last month precipitated a rousing, public quarrel that has dominated the local headlines, caused a work slowdown and threatens to spill into a full- fledged strike. Such an event would be calamitous for a country where oil accounts for 80 percent of exports, most of it bound for the United States.
"This is a tragedy," said Luis Giusti, a former company president and now senior adviser for the Center for Strategic and International Studies in Washington. "It is inconceivable that in this company people would go out and protest. They would have been fired right away. But this is a crisis situation."
Indeed, American-style button- down corporate culture has long reigned at the company, which is universally called Pdvsa (pronounced peh-deh-VEH-sah). Salaries were among Venezuela's highest. People with degrees from the best - often American - universities were recruited. And once hired, many settled in for lifelong careers, rising through a highly structured, merit- based process, several current and former employees said. In exchange, workers pledged their loyalty.
The merit system started to change, current and former managers said, after Mr. Chávez, a left- leaning populist, took office in 1999 and began what he called a social and political revolution aimed at overturning Venezuela's social order. He took control of the Congress and the Supreme Court, and has heaped withering verbal attacks on institutions that he says helped the powerful plunder the country: the church, the news media and the labor unions.
"They want to do to Pdvsa what they have done to the country, to revolutionize it," said Eddie Ramírez, manager of a Pdvsa affiliate and a leading dissident.
Calling Pdvsa a "state within a state" that had grown too big and unruly, Mr. Chávez placed people who were close to him at the company's helm, naming four presidents in three years.
His administration also moved oil policy away from a 1990's-era plan that sought to increase production from 3.3 million barrels daily in 1997 to 6 million barrels in 2006. Instead, Mr. Chávez has adhered closely to production quotas of the Organization of the Petroleum Exporting Countries, of which Venezuela is a member, holding back on oil output to increase prices.
Many of the company's managers disagree with this stance, saying instead that Venezuela should have taken advantage of Washington's desire to curtail American reliance on Middle East crude. They also say that measures like the recently approved hydrocarbon law, which increases royalties for private investors and gives the government a majority stake in joint ventures, will discourage the foreign investment necessary for developing new projects.
Managers and oil analysts, say that Venezuela has lost market share by clinging to quotas and curtailing spending on exploration, policies that are costing the country now that oil prices have stabilized and non-OPEC oil powers like Russia are likely to ratchet up production. Venezuelan oil production is now down to 2.5 million barrels a day.
"They have lost three or four years of productive capacity," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation, an industry-supported consulting group in New York.
But most troubling for the company's 15,000 or so white-collar workers is Mr. Chávez's corporate management. The latest blow came late last month, when he fired Brig. Gen. Guaicaipuro Lameda, the company president Mr. Chávez himself appointed just 15 months before. The ouster of General Lameda, who had come to be respected for his merit- based policies and efforts to contain government meddling in the company, was followed by Mr. Chávez's appointments of five of seven members of the board.
"Every government has had maybe two or three in there at the board of directors, but this is a complete takeover," Mr. Ramírez said.
The new company president is Gastón Parra, an economics professor and former central bank president known for his sharp criticisms of foreign investment in the country's oil industry.
"It is like putting the pilot of a Cessna to fly a 747," said Samuel Wilhelm, a manager with 20 years at the company. "And that is grave for a company like ours."
Mr. Parra and government officials close to Mr. Chávez did not respond to requests for interviews.
Employees say the new leadership has awakened memories of another Pdvsa, led by Hector Ciavaldini, Mr. Lameda's predecessor, a close Chávez ally under whom promotions of workers seemed predicated on ties to the Chávez administration. About 1,000 office workers, many of them top-level administrators who had spent 20 years or more in the company, took early retirement or switched jobs during Mr. Ciavaldini's 13- month tenure, Mr. Lameda confirmed in an interview.
"When you see new people on the board and see how they got there, you wonder if it was merit or whom they knew," said José García, who works in finances, has been at the company eight years and had hoped to be able to work his way up the ladder.
In Pdvsa, which has prided itself as a meritocracy, the changes at the top resonated like a sledgehammer. Managers quickly lambasted the changes in a newspaper advertisement, called a four-hour work stoppage on March 8 and followed with a work slowdown last week. They have threatened to strike unless Mr. Chávez rescinds the appointments of the board members, agreeing to a broader board that includes representatives from various Venezuelan institutions.
Fedepetrol, the union representing most of the production workers, has said it will strike if the white-collar workers do.
Mr. Chávez, in turn, has threatened to fire the protesters and send in the military to run the company if there is a strike.
Many analysts here, as well as workers at the company, do not believe that there will be a strike because of the disastrous consequences for both Pdvsa and the country. But the mere possibility that white-collar workers would walk out demonstrates the depths of the crisis.
"For the people of Petróleos de Venezuela to protest like they have signifies that they are very, very troubled, because these are people who are very prudent," said Maruja Tarre, director of the Energy Institute at Simón Bolívar University in Caracas.
Still, the dispute seems to have no end in sight, with the white-collar workers pleading for negotiations and government officials vowing not to bow to pressure.
"The two positions are hard," Mr. Lameda said. "Each has its own view, but I do not see an opening."
The company's new president and the board have posted a message on the company's Web site, calling for "serenity, in order to preserve the highest interests of the corporation and the continuity of its activities."
"Dialogue," the message adds, "is imperative in order to become familiarized with the real motivations of Pdvsa's board of directors and its intentions to forge creative work."
Meanwhile, Mr. Chávez's statements have continued to fan the flames.
Last week, he accused the company's managers of enjoying "gross privileges" and said that the state was paying for "luxurious chalets where they hold bacchanals and where the whiskey runs."
For workers at Pdvsa, the verbal assaults have no basis in reality.
"The technocrats, as they call us, have worked to get where we are," said Marjorie González, an upper- level manager with 25 years' experience. "We have worked hard to make Pdvsa the company that it is."
Fedepetrol, the largest oil union, said Wednesday it would back a general strike if convoked by managers. Executives have expressed reluctance to shut down an industry that provides 80 percent of Venezuela's export revenue and is the third-largest provider of crude oil to the United States.[End Excerpt]
At this LINK full story to (March 1, 2002)-- Venezuela's strongman faces widespread calls to step down By Phil Gunson | Special to The Christian Science Monitor
Venezuela a risk? Blame media, says Chavez --[Excerpt] Chavez, a tough-talking ex-paratrooper, has brushed aside calls to resign, ridiculed opposition moves against him and accused the media and political foes of waging a campaign of ``media terrorism'' against his self-proclaimed ``revolution''.
In comments Sunday, the Venezuelan leader slammed what he called ``perverse, immoral, lying and ill-intentioned'' coverage of Venezuela by national and international media. [End Excerpt]
Venezuelans convinced Chavez is doomed-- Angel Alvarez, director of the political studies institute at the Central University in Caracas, says Chavez has failed to deliver on his promises to improve living conditions and end corruption, and has no clear plan how to do so. "Chavez has shown no ability to maintain stable alliances and lacks an adequate policy toward the opposition," Alvarez said.
Venezuelans hope people power will persuade Chavez to resign [Excerpt] But analysts say that the current surge of dissatisfaction in South America is rooted in the entrenched poverty and deficiencies of governments. The region's decadelong commitment to democracy, which was heralded as a panacea, instead has generated a crisis of expectations that is proving contagious. [End Excerpt]
Venezuela's Chavez says he'll declare emergency and militarize company if oil workers strike-[Excerpt] CARACAS, Venezuela - President Hugo Chavez is ready to declare a state of emergency if oil-workers at the nation's state-owned oil monopoly try to paralyze production.
Chavez accused opposition labor and political leaders of sowing discontent at Petroleos de Venezuela SA and said he had a contingency plan ready should workers and management go on strike. He didn't elaborate on the plan.
"If they shut down the company, we'll militarize it. I am not going to allow Petroleos de Venezuela to be shut down," Chavez said.
"It won't bother me to continue to fulfill my obligation, to sign an emergency decree. This is a company of high strategic value, and I am ready to order its intervention and throw out those who don't want to be there," he said. [End Excerpt]
Cuba's Castro Says Venezuelan Chavez Speaks for Him -[Excerpt] Hailing the Venezuelan leader's "spirit and enthusiasm", the veteran Cuban president said Chavez would address the U.N. conference in Mexico as president of the Group of 77, which represents more than 130 developing countries.
"No other voice could be better than yours to defend the interests of the (Group of) 77. ... You will have the possibility of putting forward the point of view of the progressive people of the world," Castro added.
Chavez, hosting a special 100th edition of his "Hello President" show lasting nearly seven hours, also received calls of congratulation from Guatemalan President Alfonso Portillo and the Dominican Republic's president, Hipolito Mejia.
The Cuban leader's public praise for Chavez was certain to infuriate political opponents of the Venezuelan leader and his self-proclaimed "Bolivarian Revolution". [End Excerpt]
S&P revises Venezuela ratings outlook to negative--[Excerpt] NEW YORK, March 18 (Reuters) - Standard & Poor's said on Monday it revised its credit outlook on Venezuela to negative, indicating that a ratings downgrade may be on the way if critical economic reforms are held hostage to the political tension gripping the country.
``The current situation has led to political polarization and a sense of frustration among the population at large, including the business and labor sectors, the Catholic church, and the military,'' S&P said in a statement.
``This, in conjunction with presidential statements about the possibility of nationalizing banks ... and the danger of exchange controls or a state of emergency, have created an environment that is not conducive to investment and growth.''
The ratings agency affirmed Venezuela's single-B long- and short-term foreign currency sovereign credit ratings. At single B, the ratings are five notches below investment grade.
A downgrade would increase the cost of borrowing for the world's No. 4 oil exporter at a time when President Hugo Chavez is facing stiff domestic opposition to his leftist agenda and authoritarian style. [End Excerpt]
Bush to Be Tough on U.S. Aid During LatAm Trip-[Excerpt] During his talks with world leaders at the conference, Bush will promote his initiative to help poor nations that respect human rights, root out corruption, open their markets, and have education and health care systems.
"I'm going to be tough about it," Bush told a group of regional reporters Tuesday in a preview of his trip. "I'm not interested in funding corruption."
Bush separately had some tough talk about Venezuela's President Hugo Chavez. The image of the world's No. 4 oil exporter has taken a beating in recent months as opponents of the maverick left-wing president have stepped up protests against his three-year rule, raising fears that political confrontation may worsen and even turn to violence.
"We are concerned about Venezuela," Bush said, citing the long-term U.S. relationship with the country, particularly in the oil business.
"We are concerned any time there is unrest in our neighborhood. We are watching the situation carefully. This man was elected by the people. We respect democracy in our country, and we hope he respects the democratic institutions within his country," the president said. [End Excerpt]
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