Baker Institute’s Latin America Initiative and the Energy Forum
Americas Society / Council of the Americas
Energy, Policy and Politics: The Changing Energy Landscape
in Latin America
Venezuela: Oil Sector Performance
1997 - 2008
Ramón Espinasa
p
Houston - Texas
February 26th 2009
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The Facts
1997 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
Crude Oil Production
1997 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
According to the IEA, PDVSA own production was in Dec 08 45% lower than in Dec
97.
3.5
3
2.5
2
1.82
1.5
1
PDVSA Crude Production
0
0.5
Ja
n9
Ju 7
l-9
Ja 7
n9
Ju 8
l-9
Ja 8
n9
Ju 9
l-9
Ja 9
n0
Ju 0
l-0
Ja 0
n0
Ju 1
l-0
Ja 1
n0
Ju 2
l-0
Ja 2
n0
Ju 3
l-0
Ja 3
n0
Ju 4
l-0
Ja 4
n0
Ju 5
l-0
Ja 5
n0
Ju 6
l-0
Ja 6
n0
Ju 7
l-0
Ja 7
n0
Ju 8
l-0
8
0
Source: IEA
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
According to the IEA, PDVSA own production was in Dec 08 45% lower than in Dec
97. The drop was partially compensated by the coming on stream of the Strategic
Associations. Total production was 30% lower in Dec 08 compared to Dec 97.
3.5
3
2.5
2.35
Strategic Associations
0.53
2
1.82
1.5
1
PDVSA Crude Production
0
0.5
Ja
n9
Ju 7
l-9
Ja 7
n9
Ju 8
l-9
Ja 8
n9
Ju 9
l-9
Ja 9
n0
Ju 0
l-0
Ja 0
n0
Ju 1
l-0
Ja 1
n0
Ju 2
l-0
Ja 2
n0
Ju 3
l-0
Ja 3
n0
Ju 4
l-0
Ja 4
n0
Ju 5
l-0
Ja 5
n0
Ju 6
l-0
Ja 6
n0
Ju 7
l-0
Ja 7
n0
Ju 8
l-0
8
0
Source: IEA
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
Official sources report a drop in PDVSA production of 13% between 1997 and 2008
3.50
Official
3.00
2.50
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA. 2008 is the average up to September.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Official sources report a drop in PDVSA production of 13% between 1997 and 2008,
according to the IEA the drop was 42% during the same period.
3.50
Official
3.00
IEA
2.50
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA - IEA
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Production from the Strategic Associations is very much the same according to both
sources. It reached 0.6 Mbd in 2005 and nowadays is down to 0.5 Mbd.
0.60
0.50
Official
0 40
0.40
0.30
IEA
0.20
0.10
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA - IEA
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Adding up PDVSA own production and that of the Strategic Associations, official
figures report slightly higher production in 2008 than in 1997
3.5
Official
3
2.5
2
1.5
1
0.5
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA. 2008 is the average up to September.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Adding up PDVSA own production and that of the Strategic Associations, official
figures report slightly higher production in 2008 than in 1997, according to the IEA
production in 2008 is 26% lower than in 1997 and has declined since 2005.
3.5
Official
IEA
3
2.5
2
1.5
1
0.5
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA - IEA
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Domestic Consumption of Oil Products
1997 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
According to official figures domestic fuel consumption in 2007 and 2008 was similar
to that of 2002
0.90
0 80
0.80
0.70
Official
0 60
0.60
0.50
0 40
0.40
0.30
0 20
0.20
0.10
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA. 2008 is the average up to September.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
According to official figures domestic fuel consumption in 2007 and 2008 was similar
to that of 2002, assuming that domestic demand grows with domestic activity after 2002
fuel consumption in 2008 could be 40% higher than the official figure.
0.90
0 80
0.80
Estimate
0.70
Official
0 60
0.60
0.50
0 40
0.40
0.30
0 20
0.20
0.10
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives at all to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, relative gasoline prices fell 70% in relative terms.
terms
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one inducing huge smuggling
out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives at all to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, relative gasoline prices fell 70% in relative terms.
terms
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one inducing huge smuggling
out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, relative gasoline prices fell 70% in relative terms.
terms
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one inducing huge smuggling
out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, the relative price of gasoline fell 70%.
70%
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one inducing huge smuggling
out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, the relative price of gasoline fell 70%.
70%
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one, inducing huge
smuggling out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
There are at least five reasons to believe that fuel consumption in 2008 is closer to the
estimated than the official figure:
First: The economy grew 51% between 2002 and 2008, petroleum consumption is
estimated to grow 44%, liquid fuel prices remained constant in nominal terms all along.
Second: The domestic automobile fleet increased 49% during the period and there were
no incentives to retire the old fleet.
Third: Gasoline prices remained constant in nominal terms while CPI grew 222%
during the period
period, the relative price of gasoline fell 70%.
70%
Fourth: The nominal price remained constant in dollar terms (0.14 $/g) while the
international price increased more than fivefold during the period. The price differential
vis-à-vis neighboring countries was between 20 and 30 to one inducing, huge
smuggling out of the country.
Fifth: Associated g
gas production
p
declined with crude output
p resulting
g in the burningg of
sizeable amounts of liquids for thermoelectricity generation in western Venezuela.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
Domestic fuel consumption increased twofold while production declined 42% between
1997 and 2008
3.50
IEA
3.00
2.50
E ti t
Estimate
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: IEA and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Consequence of growing domestic consumption and falling production, the share of
PDVSA production to supply the domestic market increases from 12% up to 44%
between 1997 and 2008.
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1997
26/02/09
1998
1999
2000
2001
2002
2003
2004
2005
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
2006
2007
Ramón Espinasa
2008
Petroleum Exports
1997 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
According to official figures petroleum exports were in 2008 similar to those of 1997
3.50
Official
3.00
2.50
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA. 2008 is the average up to September.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
According to official figures petroleum exports were in 2008 similar to those of 1997,
estimated exports, on the basis of IEA production and calculated domestic fuel
consumption, declined by 40% between 1997 and 2008.
3.50
Official
3.00
Estimate
2.50
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA – IEA and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Strategic Associations output per design is export bound thus domestic supply comes
out of PDVSA own production. On the basis of official figures PDVSA exports
declined by 17% between 1997 and 2008
Official
3.00
2.50
2 00
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA. 2008 is the average up to September.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Strategic Associations output per design is export bound thus domestic supply comes
out of PDVSA own production. On the basis of official figures PDVSA exports
declined by 17% between 1997 and 2008, estimated exports declined 60% in the period.
Official
3.00
2.50
Estimate
2 00
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: MEM / PDVSA – IEA and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Petroleum Exports by Markets
1997 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
According to official EIA/DOE figures US petroleum imports from Venezuela declined
by 1/6 between 1997 and 2008
1.80
United States: Crude and products Imports from Venezuela
1 60
1.60
1.40
1 20
1.20
1.00
0 80
0.80
0.60
0 40
0.40
0.20
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
According to official EIA/DOE figures US petroleum imports from Venezuela declined
by 1/6 between 1997 and 2008, products imports declined by almost 2/3.
1.80
United States: Crude and products Imports from Venezuela
1 60
1.60
Products
1.40
1 20
1.20
1.00
0 80
0.80
Crude
0.60
0 40
0.40
0.20
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
The drop in US crude and products imports from Venezuela accelerated all along 2008.
2.00
1.80
United States: Crude and products Imports from Venezuela
1.60
1.40
Products
1.20
1.00
0 80
0.80
0.60
Crude
0.40
0.20
A
ug
-0
0
Fe
b01
A
ug
-0
1
Fe
b02
A
ug
-0
2
Fe
b03
A
ug
-0
3
Fe
b04
A
ug
-0
4
Fe
b05
A
ug
-0
5
Fe
b06
A
ug
-0
6
Fe
b07
A
ug
-0
7
Fe
b08
A
ug
-0
8
0.00
Source: EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
It is possible to break down US imports between those of the Strategic Associations
designed to supply this market and exports by PDVSA to supply its own network and
clients.
1.80
United States: Imports from Venezuela
1 60
1.60
1.40
1 20
1.20
1.00
0 80
0.80
0.60
0 40
0.40
0.20
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: IEA y EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
The drop in US imports from Venezuela has been at the expense of PDVSA own
exports. US imports out of PDVSA own production have declined by almost 2/3.
1.80
United States: Imports from Venezuela
1 60
1.60
1.40
1 20
1.20
PDVSA
1.00
0 80
0.80
0.60
0 40
0.40
Strategic Associations
0.20
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: IEA y EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
The drop in US imports out of PDVSA own production accelerated in 2008.
2.00
United States: Imports from Venezuela
1.80
1.60
1.40
1.20
Strategic Associations
1.00
0 80
0.80
0.60
PDVSA
0.40
0.20
A
ug
-0
0
Fe
b01
A
ug
-0
1
Fe
b02
A
ug
-0
2
Fe
b03
A
ug
-0
3
Fe
b04
A
ug
-0
4
Fe
b05
A
ug
-0
5
Fe
b06
A
ug
-0
6
Fe
b07
A
ug
-0
7
Fe
b08
A
ug
-0
8
0.00
Source: IEA y EIA / DOE
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
It is possible to break down total estimated exports between exports to the US and to
other markets.
3.00
Total Exports
2.50
2 00
2.00
1.50
1.00
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: AIE, EIA / DOE and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
It is possible to break down total estimated exports between exports to the US and to
other markets. Exports to other markets have fallen faster than total exports.
3.00
Total Exports
2.50
2 00
2.00
Other Markets
1.50
1.00
United States
0.50
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: AIE, EIA / DOE and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
Exports to markets other than the US dropped by 2/3 between 1997 and 2008. Roughly
0.4 Mbd are sold to different LAC countries under different government to government
agreements and the rest to China.
1.20
Exports to Markets other than the United States
1.00
0 80
0.80
0.60
0.40
0.20
0 00
0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: AIE, EIA / DOE and own calculations
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
2008
The Rise and Fall of PDVSA
1975 - 2008
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The keys to PDVSA’s success: Arm’s length relationship
• Seamless nationalization process securing operational continuity
• No interference with personnel management and operational
decision making.
• Operational and personnel management systems as well as those of
checks and balances inherited from the IOC.
• Run as a private company: relationship through shareholder
meetings and ruled by the Code of Commerce, securing transparency.
• Clear cut and transparent revenue distribution rules.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The keys to PDVSA’s success: Arm’s length relationship
• Seamless nationalization process securing operational continuity
• No interference with personnel management and operational
decision making.
• Operational and personnel management systems as well as those of
checks and balances inherited from the IOC.
• Run as a private company: relationship through shareholder
meetings and ruled by the Code of Commerce, securing transparency.
• Clear cut and transparent revenue distribution rules.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The keys to PDVSA’s success: Long term planning and strategic
vision
• Consolidation: mid 70s to late 80s.
– Production capacity at 2.5 Mbd
– Domestic refining upgraded capacity at 1.4 Mbd
• Internationalization: mid 80s to early 90s.
– International
I t
ti l refining
fi i capacity
it 1.4
1 4 Mbd
• Expansion: early to late 90s.
– Opening Strategy
– Production at 3.5 Mbd
•Restructuring:
es uc u g: latee 90s.
– Three vertically integrated companies into an single Corporation
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The reasons for demise of PDVSA: Government control
• Interference in personal management and operations
• Use of PDVSA resources for Government policies
• Discretional
Di
i l distribution
di ib i off revenue
Conducive to growing tension between the Government and
PDVSA’ss professional management resolved in the all out strike and
PDVSA
the demise of PDVSA as a first class oil company.
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The reasons for demise of PDVSA: Government control
• Interference in ppersonal management
g
and operations
p
• Use of PDVSA resources for Government policies
• Discretional distribution of revenue
Conducive to growing tension between the Government and
PDVSA’s professional management resolved with the all out strike
and the demise of PDVSA as a first class oil company.
The outcome:
• Half
H lf the
th personnell
• 2/3 Managers and Professionals
• 282.000 years of accumulated experience
► The consequence is that described above
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The reasons for demise of PDVSA: Government control
• Interference in ppersonal management
g
and operations
p
• Use of PDVSA resources for Government policies
• Discretional distribution of revenue
Conducive to growing tension between the Government and
PDVSA’s professional management resolved with the all out strike
and the demise of PDVSA as a first class oil company.
The outcome:
• Half
H lf the
th personnell
• 2/3 Managers and Professionals
• 282.000 years of accumulated experience
► The consequence is that described above
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The reasons for demise of PDVSA: Government control
• Interference in ppersonal management
g
and operations
p
• Use of PDVSA resources for Government policies
• Discretional distribution of revenue
Conducive to growing tension between the Government and
PDVSA’s professional management resolved with the all out strike
and the demise of PDVSA as a first class oil company.
The outcome:
• Half
H lf the
th personnell
• 2/3 Managers and Professionals
• 282.000 years of accumulated experience
►The consequence is that described above
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa
The reasons for demise of PDVSA: Government control
• Interference in ppersonal management
g
and operations
p
• Use of PDVSA resources for Government policies
• Discretional distribution of revenue
Conducive to growing tension between the Government and
PDVSA’s professional management resolved with the all out strike
and the demise of PDVSA as a first class oil company.
The outcome:
• Half
H lf the
th personnell
• 2/3 Managers and Professionals
• 282.000 years of accumulated experience
► The consequence is that described above
26/02/09
Energy, Policy and Politics: The Changing Energy Landscape in Latin America
Venezuela: Oil Sector Performance 1997 - 2008
Ramón Espinasa