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Editorial Commentary
Gustavo Coronel:
PDVSA: Ramirez versus Ramirez
Rafael Ramirez is the President of Petroleos de Venezuela and the Minister of Energy and Petroleum. He is also the new Food Czar of the Chavez regime. His salary is in the hundreds of thousands of dollars per year, or perhaps more. He is getting paid this fabulous salary to destroy PDVSA, to politicize it and to obey the orders of Hugo Chavez about what use should be given to oil income and to the organization. His petroleum career has been very undistinguished but now it has become criminal.
Eddie Ramirez is the leader of Gente del Petroleo. He has stayed in Venezuela after Juan Fernandez and Horacio Medina had to leave the country. He is seen in all marches against the regime and he writes consistently in newspapers and websites about PDVSA and the harm current management is inflicting on the organization. He is not getting paid to defend PDVSA from the other Ramirez. Probably, not even his pension is being regularly paid. He symbolizes the dignity and true love for the organization that characterizes the thousands of petroleum managers and technical staff who lost their jobs after they protested against the politicization and prostitution of the company by Hugo Chavez and his gang.
The two Ramirez are not blood relatives and they are far apart in ethical postures. While Ramirez the politician is starting a food importing business in PDVSA, violating the nature of the organization, Ramirez the manager is telling us that Exploration in PDVSA is at a standstill. Eddie says: “In spite of announcements about drilling platforms in the Orinoco Delta there are no exploration projects under way. On the other hand CUPET and PDVSA are getting ready to explore in offshore Cuba and Chavez has offered Ecuador and Dominican Republic to explore for oil there”.
While Ramirez the ‘revolutionary” travels all over the world singing Chavez’s praises Eddie Ramirez tells us: “ Neither the ministry nor PDVSA give Venezuelans the true volume of oil production…In the year that jut ended production was only 2.384.000 barrels per day while PDVSA keeps insisting that produces 3.200.000 barrels per day…this is impossible to do with the amount of drilling rigs in operation…in October 2007 there were only 72 rigs versus a planned mount of 191…. The electrical generators are using crude oil because there is no gas available…and if there is insufficient gas this is due to the low crude oil production since natural gas is associated with the oil… we must remember that in 2001 we were saying that PDVSA would be producing 5.4 million barrels per day in 2007…. Readers can estimate the [enormous] financial losses of PDVSA due to this gap between plan and reality”.
While Ramirez the minister is busy ordering PDVSA staff to wear red to the offices Eddie Ramirez tells us: “There were 16 industrial accidents that we know of in our refineries during 2007… five workers died…and there were high financial losses…in 2003 there were six accidents…this illustrates theincreasing lack of properly trained technicians and of experienced managers…In January 2008 there have already been two industrial accidents in El Palito and Amuay… on top of this the Lieutenant Colonel said long time ago that refineries in Cabruta, Barinas and Caripito would be built but there are no economic justifications for this…”.
While Ramirez the chavista announces his future invasion of Bolivia [to defend Evo Morales] Eddie Ramirez reminds us “the domestic demand of gasoline and distillates reached almost 800.000 barrels per day. This is partly explained by the low production of oil that results in insufficient natural gas being available to be used in industry and by the contraband of gasoline into Colombia and Brazil…. This means less oil for exports… today there are shortages of gasoline in the country… PDVSA is actually importing some components… there are problems of distribution… the president of PDVSA has said that gas stations would be turned over to Community Councils and this would further deteriorate the situation… according Mariana Parraga, in El Universal, the subsidy in the domestic market already amounts to some $12.5 billion per year”.
Ramirez the president keeps sending the money PDVSA needs for reinvestment to Chavez’s “social” programs. Meanwhile, says Ramirez the observer: “Venezuela is giving oil away for free to Cuba, Uruguay, Bolivia, Paraguay, Nicaragua, PetroCaribe and Chavez is offering to build refineries in Cuba, Brazil, Ecuador, Nicaragua, Jamaica, Paraguay and Dominica…. According journalist Suarez Nuñez the offers by Chavez amount to $25.8 billion”.
Ramirez the bureaucrat accepts that PDVSA can do anything, importing food, repairing potholes, building roads while Ramirez the technocrat says: “PDVSA has serious problems of cash flow… new debt is of the order of $17 billion…. PDVSA is demanding payment from clients within eight days of delivering, instead of the traditional thirty days”.
While Ramirez the minister employs grandiose rhetoric about independence and sovereignty Ramirez the manager says: ‘Previous international operators are now owners of up to 49% of the oil…. Companies from Cuba, Vietnam and Uruguay, among others, are engaged in the Orinoco area without having experience….”
Ramirez the incompetent speaks about grandiose gas projects while Eddie Ramirez says: “No offshore gas projects have been finished… The Gasoducto del Sur turned out to be a total fiasco due to the lack of gas and environmental and financial considerations…. The project of gas for automobiles might fail again since it can only be applied to 14% of existing vehicles.”
Ramirez the president/minister talks proudly of social programs while Ramirez the former manager reminds us that: “new PDVSA affiliates to build houses, to engage in agriculture, to import food, to build ships, to engage in industries and urban development destroy the mission and objectives of the company and will increase inefficiency”.
Rafael Ramirez is the symbol of a company that has gone the way of corruption. Eddie Ramirez tells us “The famous case of the bag with $800,000 is only a small indication…. Ship contracting, marketing commissions, fuel deliveries that get lost, drilling rigs that do no exist, appear to make up a gigantic corruption in red PDVSA….”
While Ramirez the president talks about socialism of the XXI century Eddie Ramirez says: “26 workers have died in industrial accidents since 2003…”.
Ramirez-vs- Ramirez symbolizes the tragedy of an oil company that used to be the pride of Venezuelans, now the political instrument of a despot. I am one who believes that PDVSA is in an irreversible path to financial collapse. They have an acute problem of cash flow, yes, but I think they are also incapable of mending their ways. Chavez is an ignorant who believes that PDVSA’s managers would be lying to him if they told him that the resources of the company should be dedicated to reinvestment and to oil related activities. If this took place these managers would lose their jobs. Therefore, they just keep silently doing the things that lead to the destruction of the company since, at least, they keep getting their enormous salaries and even some can actively engage in corruption with their friends the contractors, as Vice president of the company Luis Vierma accepted a few months ago, without much shame, before the Venezuelan National Assembly.
Gustavo Coronel is a 28 years oil industry veteran, a member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), author of several books. At the present Coronel is Petroleumworld associate editor and advisor on the opinion and editorial content of the site. Petroleumworld does not necessarily share these views.
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Petroleumworld News 01/31/08
Copyright© 2008 Gustavo Coronel. All rights reserved.
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