Venezuela’s President Nicolas Maduro declared an “energy emergency” as he announced a commission to revamp state oil company Petroleos de Venezuela SA, redoubling efforts to shore up the nation’s crumbling oil industry.
Economy Vice President Tareck El Aissami will lead the commission, which will focus on boosting crude production, Maduro said. El Aissami, who is already an external director at PDVSA, will be joined by former Energy Minister Asdrubal Chavez as commission vice president, Defense Minister Vladimir Padrino, armed forces Strategic Operational Commander Remigio Ceballos and others.
“I won’t accept more excuses,” Maduro said at an event with PDVSA workers broadcast on state television. “Either we produce or we produce. Venezuela has to be an oil power.”
The intervention, which installs a key Maduro loyalist at the top of the state oil producer, shows the growing urgency to increase output of the country’s primary source of cash. The Maduro regime has previously proposed giving majority shares and control of its oil industry to big international corporations, which would forsake decades of state monopoly.
The planned intervention — which Bloomberg News reported earlier on Wednesday — comes a day after the U.S. imposed sanctions on the biggest exporter of Venezuelan crude. The decision to target the Geneva-based trading arm of Rosneft PJSC could have a significant effect on shipments of Venezuelan crude to China and India.
Maduro said he had “investment offers” for more than $25 billion in oil production projects and refinery rehabilitations. He did not provide details.
The oil commission will also include current Energy Minister Manuel Quevedo, Interior Minister Nestor Reverol, Transportation Minister Hipolito Abreu, Science and Technology Minister Gabriela Jimenez, Social Labor Minister Eduardo Pinate. The commission will also include seven oil industry workers, a militia member and a state university president.
Maduro said the commission will issue measures to “guarantee national energy security and protect the industry from imperialist aggression.”
While Maduro vowed to increase production to two million barrels a day two years ago, the goal remains far from reach as the country’s economy enters its seventh year of economic decline, plagued by the failure of public utilities and widespread shortages outside the capital. Production fell to 733,000 barrels a day in January, a 36% drop from a year earlier, according to OPEC secondary sources.
Rosneft Trading accounted for about half of Venezuela’s 874,649 barrels a day of exports in January, according to shipping reports and tracking data compiled by Bloomberg. It’s unlikely that other trading companies will step in and take charge of volumes traded by Rosneft, FGE analysts said in a note earlier Wednesday.
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