Benedict Mander :
PDVSA: bad luck or bad management?
Was it bad luck for Venezuela's state oil company PDVSA to be hit with another major accident less than a month after a massive explosion at the Opec country's Amuay refinery killed more than 40 people?
It would seem pretty harsh to blame PDVSA given that the fire still blazing at the El Palito refinery was apparently caused by lightening . Nevertheless, with presidential elections fast approaching, that is exactly what Hugo Chávez's opponents are doing.
Actually, El Palito is an area where lightening strikes often, and opposition governor Henrique Salas Feo says that he warned the government shortly after the Amuay disaster to “urgently” check the El Palito refinery, and that it was missing lightening conductors. He claims that in only 8 of the refinery's 78 tanks has maintenance work been carried out on their lightening conductors.
That may smack of opposition opportunism, but the fact is that there are fires in Venezuela's refineries on an almost weekly basis – and lack of maintenance is often to blame.
Luckily, at El Palito no lives have been lost, although about 120 people have been killed because of accidents at PDVSA over the last decade, according to the opposition.
Still, it is one more reason for PDVSA to think twice about plans to build a host of refineries abroad – often in countries with like-minded governments like Cuba, Nicaragua, Ecuador, Brazil, Vietnam and Syria – if not even its refineries at home are working properly.
Never mind whether it is strategically sensible to build refineries in those countries, or whether PDVSA has enough oil to send to them, or even enough money to build them. In fact, only this week Brazil's Petrobras expressed disappointment at PDVSA's delays in formalising its participation in a refinery joint venture in Pernambuco – basically because PDVSA still hasn't forked out the cash, seven years after first agreeing to help build it.
There's a possibility, though, that the incident at El Palito will help to drive home a fairly widespread sentiment that much of the country's infrastructure is falling apart thanks to government mismanagement and underinvestment, and thus have an impact, however small, on the elections. It might even exacerbate gasoline shortages – although PDVSA firmly denies this – and in turn further denting Chávez's popularity.
Almost certainly, if the socialist leader does not win (many pollsters are predicting that he will), those plans to build refineries in far-flung countries would be shelved.
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Benedict Mander is the FT's Venezuela and Caribbean correspondent, based in Caracas since 2007. He previously covered the Southern Cone for the FT from Buenos Aires, having joined the paper in Mexico in 2005. Petroleumworld does not necessarily share these views.
Editor's Note: This commentary was originally published by
beyondbrics an FT blog , on Sept. 20, 2012 . Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 09/21/2012
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