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Will PDVSA transfer Orimulsion brand and patents to China?

By Veneconomy

07.06.05 | In today’s Venezuela, “there’s no smoke without a fire stoked by dollars,” a more modern rendering of the proverb, could well apply. This is the case of the constant reports over the last couple of years of the government’s intention to do away with anything to do with Orimulsion. The issue has just reared its head again, this time in connection with Sinovensa, the Venezuelan-Chinese company that is to manufacture this fuel.

Last week, El Universal reported that PDVSA was allegedly intending to negotiate, on behalf of Bitor, the first Orimulsion module with China National Petroleum Corporation, Sinovensa’s majority shareholder, and to transfer the Orimulsion brand and patents with no reservations or restrictions to the Chinese company.

A denial by PDVSA was not long in coming, in which it declared that it will not be closing down the module in Morichal, which will continue to supply Orimulsion, and that it will not be transferring the brand and patents to Sinovensa. The communiqué specifies that Sinovensa will only share the patent, which will continue to belong to the Bolivarian Republic of Venezuela, and that, moreover, it will pay a royalty for use of the technology. It also clarifies that it has not transferred either its customers or its supply contracts to Sinovensa.

However, there are persistent rumors in the oil industry that PDVSA is in fact going ahead with a deal that will be detrimental to the Republic, and that it apparently involves transferring all brand and patent rights, with no restrictions whatsoever, as well as the rights associated with administrative procedures. On top of that there is the position of Vice-minister or Hydrocarbons Bernard Mommer, held since his time at PDV UK, which supports the sale of the Bitor module and negotiating a withdrawal from the existing Orimulsion supply contracts.

If what the PDVSA communiqué says about not transferring the patents is true, Venezuelans will be able to sleep easy because the authorities would not be giving away technology in which the country invested years of research, both talent and economic resources. That being the case, it would be to the government’s advantage to make its intention to negotiate this deal public, with as much information and transparency as possible on the agreements reached by the parties. If the rumors circulating within the industry turn out to be true, the Venezuela of the 5th Republic would be once again giving away to other countries the resources it so badly needs to provide its citizens with basic welfare services. A few months ago, the Chávez administration bought $500 million in Argentinean debt. Then, unbelievably, it set up an operating base for PDVSA in Cuba to handle business in the Caribbean, plus offices for the Banco Industrial de Venezuela. Now it seems that it’s China’s turn to get a share of the booty, this time consisting of high technology devised by Venezuelans; and once this technology is in their hands, the Chinese will undoubtedly make good use of it.

While the “international allies of the revolution” are growing fat thanks to the generosity of the Bolivarians, the government is failing with its housing program and to make much-needed investments in the oil industry. VenEconomy hopes that the information contained in the PDVSA communiqué is true and that the company is continuing to honor its supply contracts with countries such as Singapore, Canada, and Japan.

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