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Petroleos de Venezuela: Loyalty to Chávez is all that matters

By Gustavo Coronel

July 3, 2004 - Oil production is plummeting, well drilling declines, exploration is almost non-existent, refineries are working at a fraction of capacity, exports lack quality control, gasoline supplies for the local market are unreliable, smuggling of products to Colombia and Brazil keeps prospering, maintenance is a thing of the past, industrial accidents are no longer news. This is a snapshot of Petroleos de Venezuela in 2004.

"Do not worry," says Chávez to his followers, "We control the company. This is all that matters. In this manner, the monies obtained from the sale of oil are coming directly into our hands, the hands of the revolution. We have stopped all this non-sense about the money going to the National Fisc through the Venezuelan Central Bank. We have stopped the non-sense about contracting through bidding. We have stopped the non-sense of having to have a national budget approved by the National Assembly in order to be able to spend the money. Since the Assembly is also in our hands, why should we lose time in going through the motions of a democracy in which we no longer believe?"

"We are in the middle of the second battle of Santa Inés. We are in a revolution. By definition revolution is not an orderly affair but a force that takes us where it will, not where we plan to go. We are like feathers carried by the wind of revolution. . . ."

The vice-president of finance at PDVSA, Mr. Jose Rojas, smiles at the TV cameras and proudly declares: "This year we will not be able to deliver our financial statements in time to the US Securityies and Exchange Commission. We have internal operational difficulties."

"The objective," says Chávez, "is to stop this non-sense of delivering these statements to anyone abroad or here. Why should we account for the monies, which are ours to use, as we deem convenient? No one has the right to know about our affairs. We are a sovereign State. In addition, there are uses for the money that we do not want anyone to know about, uses that will further our revolution. This is the only important thing."

The vice-president of PDVSA, Mr. Rojas, explains further the situation within PDVSA: "We are doing all of our accounting manually," he says. Venezuelans listen to Rojas in awe. How is it possible, says Diego Gonzalez, a Venezuelan citizen, that a company that produces 2.5 million barrels per day (b/d), exports almost 2 million b/d, pays salaries to 40,000 employees, that has dozens of joint ventures and sells 450,000 b/d in the domestic market, should be doing its accounting by hand? This is preposterous, citizens say. How can managers responsible for this situation remain in the company? Why haven't the incompetent and corrupt been dismissed already?

"Precisely, this is the way we like it," says Chávez. "Creating a black box in the finances of PDVSA allows us to do what we want, when we want it. Forget about shareholder meetings and financial statements. Zamora did not need those girlish refinements to get rid of the oligarchs. The managers of PDVSA are not there to manage, in the traditional sense of the word. They are there to serve the revolution."

Mr. Rojas adds: "We have so much money in our system that we want to buy back most of our debt. We also have given USD $1.7 billion to the Misiones and are creating two more funds for $1 billion each, one for agriculture and the other one for . . . some other social uses of the same importance." And the reporters ask him: "What about maintenance and production drilling?"

"Who needs more production?" says Chávez. "The production we already have, at the prices we enjoy, is giving us all the money that we need. We are not greedy. The bond buyback was reported to me as a sensible operation, although some say that it was designed for us and our friends in the financial community to make a killing. This is not accurate and, at any rate, secondary to our main objective of escaping the overseeing of foreign agents like those at the Securities and Exchange Commission."

The story of the progressive disintegration of PDVSA keeps playing before the eyes of the nation and of the whole world. It is a story of corruption at the highest levels, of incompetence at managerial levels and of shameless impunity in the misuse of the national money. This is a crime that will someday have its Nuremberg because the damage to the country has been too great, in some areas almost irreversible. A whole generation of petroleum managers and technicians displaced by the barbarians is being lost to the nation forever. Millions of barrels of oil will never be produced. The tribe in power has prostituted the work ethics of the corporation.

No matter from what angle we look at the tragedy of PDVSA we find there is no redemption for the group who has led this major crime.

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