Published On: Wed, Aug 9th, 2017

In political storm, Venezuela state-run oil company PDVSA drifts further

PDVSACARACAS, WILLEMSTAD - To survive months of street protests and an economy in tailspin, Venezuelan President Nicolas Maduro is trying to turn state oil company PDVSA into a bastion of support, further degrading an already vulnerable enterprise.

Political appointees are gaining clout at the expense of veteran oil executives, while employees are under mounting pressure to attend government rallies and vote for the ruling Socialists. The increasing focus on politics over performance is contributing to a rapid deterioration of Venezuela’s oil industry, home to the world’s largest crude reserves, and to a brain drain at the once world-class company.

Interviews with two dozen current and former employees, foreign oil executives, and contractors point to a PDVSA coming apart at the seams.

“Everything is a disaster and yet we have to clap,” said a PDVSA employee, who asked to remain anonymous because she feared retaliation.

After four months of deadly protests against the unpopular president, new company leadership is increasingly pressuring employees to attend Socialist Party rallies and at times asking for letters explaining absences.

Managers told workers they would be fired unless they voted in Maduro’s controversial election on July 30 of a new legislative superbody meant to rewrite the Constitution, which was widely denounced as a move toward dictatorship.

Critics have long contended that PDVSA – short for Petroleos de Venezuela SA – was being turned into the corruption-riddled heart of late President Hugo Chavez’s “21st century socialism”, at the expense of the OPEC nation’s once-flourishing oil industry.

Now Venezuela’s oil production is on track to end 2017 at a 25-year low, but the leftist government still relies heavily on PDVSA to be its financial motor.

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