PdV partners fret over managerial vacuum

A presidential commission tasked with reorganizing Venezuela's state-owned PdV is sowing confusion among the oil company's joint venture partners over who is running the firm after chief executive Manuel Quevedo was effectively nudged out.

"It is unclear who we are supposed to deal with now when discussing operational investments and other matters," one representative of a European company partnered with PdV tells Argus.

Others echoed this sentiment, adding that the uncertainty undermines government efforts to encourage more investment and assume more operational control of joint venture projects.

Communication between the companies and PdV over project operations and potential investments has stalled in the absence of managerial clarity, on top of the deterrents of escalating US sanctions and the collapsing oil price.

Quevedo still heads the oil ministry, and he represented Venezuela at last week's Opec+ meeting in Vienna. He is also a nominal member of the commission that President Nicolas Maduro appointed in February to restructure the company.

But control of PdV has shifted to the commission's co-chairs, industries minister Tareck El Aissami and former oil minister Asdrubal Chavez. They have stripped Quevedo of all authority to award project and procurement contracts, and some of Quevedo's associates have been detained in recent days in a selective crackdown on corruption.

PdV's western partners in particular are deterred from communicating with the commission, because El Aissami and Chavez are subject to targeted US sanctions, resulting in a managerial vacuum. The EU has targeted sanctions on El Aissami as well.

PdV's main foreign partners include Chevron, Repsol, Eni, Chinese state-owned CNPC and Russia's state-controlled Rosneft.

In the commission's first move, PdV's board nominally chaired by Quevedo was restructured to include a mix of industry veterans and political loyalists. The board's activities are now directed by Aissami and Chavez, with no input from Quevedo, a union official close to the board tells Argus.

The union official said all contracts awarded during Quevedo's tenure that started in November 2017 are subject to audit. Over a dozen upstream contracts with obscure companies awarded by Quevedo in September 2018 have been canceled.

Divisional managers and PdV headquarters in Caracas have been instructed to remit all production, refining, commerce and supply reports directly to the PdV commission.

"The general is no longer in charge of anything at the ministry or PdV," the union official said.

Quevedo, a former National Guard general, has not commented on his role or the restructuring.