Page 4 - LatAmOil Week 17 2020

LatAmOil COMMENTARY LatAmOil
Moves toward restructuring
of PdVSA not likely to bear fruit
The company is now under the control of officials who have called for a major restructuring. But the US sanctions regime may not leave it much room to change
WHAT:
Venezuela’s new oil minister and PdVSA CEO are members of a reform- minded committee that favours change.
WHY:
US sanctions will complicate efforts towards privatisation and restructuring.
WHAT NEXT:
PdVSA’s most urgent near-term concern may be local discontent over shortages of food and other basic supplies.
EARLIER this week, Venezuelan President Nicolas Maduro took steps that appear to lay the groundwork for the transformation of PdVSA, the national oil company (NOC).
More specifically, he signed executive decrees that ousted Manuel Quevedo, a major-general in the National Guard, from his position as oil minister and CEO of PdVSA. These documents named Quevedo’s replacement as Vice-Presi- dent Tareck El Aissami, one of Maduro’s political allies, and appointed another loyalist – Asdrubal Chavez, a cousin of former President Hugo Chavez – to serve as acting CEO of PdVSA.
They also charged both El Aissami and Chavez with revamping PdVSA to make it more competitive, profitable and attractive to investors.
In a sense, these decrees do nothing more than formalise existing arrangements. El Aissami and Chavez have all but taken control of PdVSA since mid-February, when Maduro
appointed them to a committee established for the purpose of restructuring the NOC.
At the same time, Quevedo has gradu- ally faded into the background. His last major foray on PdVSA’s behalf was his attendance at the OPEC+ group meeting in Vienna in early March.
Officials in Caracas would probably prefer to forget that meeting, which led to the collapse of the OPEC+ deal that was in place at the time – and then to the eruption of a price war between Saudi Arabia and Russia, the world’s two largest oil producers. That price war, in turn, has exac- erbated the bearish impact of the coronavirus (COVID-19) pandemic, which has considerably dampened global energy demand.
Setting a new course?
In any event, Maduro seems to hope that El Aissami and Chavez will follow a path that leads PdVSA in a different direction. 
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w w w . N E W S B A S E . c o m Week 17 30•April•2020