Petróleos de Venezuela, S.A. (PDVSA, ; English: Petroleum of Venezuela) is the state-owned oil and gas company of Venezuela. It has activities in exploration, production, refining and exporting of oil, as well as exploration and production of natural gas. Since its founding on January 1, 1976, with the nationalization of the Venezuelan oil industry, PDVSA has dominated the petroleum industry of Venezuela, one of the world's largest oil exporters.
Oil reserves in Venezuela are the largest in the world, and the state-owned PDVSA provides the government of Venezuela with substantial funding resources.[6] Following the Bolivarian Revolution, PDVSA was mainly used as a vital source of income for the Venezuelan government.[7] Profits were also used to assist the presidency, with funds directed towards allies of the Venezuelan government.[7] With PDVSA focusing on political projects instead of oil production, mechanical and technical statuses deteriorated while employee expertise was removed following thousands of politically motivated firings.[7] Incompetence within the company led to serious inefficiencies and accidents, as well as endemic corruption;[8] at least US$11 billion was stolen between 2004 and 2015. Jorge Giordani, the minister of planning until 2014, estimated that $300 billion was simply stolen. Due to infrastructure and management struggles, PDVSA has seen production decline from 3.5 million barrels per day in the 1990s to approximately 800,000 barrels per day in the 2020s.[9] In 2018, thousands of workers left PDVSA,[10] especially after the company was put under military control.[11]
Reserves and capacity
As of 2003, Venezuela had 77.5 Goilbbl of conventional oil reserves according to PDVSA figures, the largest in the Western Hemisphere and making up approximately half the total. This puts Venezuela as fifth in the world in proven reserves of conventional oil. By also including an estimated 235 Goilbbl of tar-like extra heavy crude oil in the Orinoco Belt region, Venezuela claims to hold the largest hydrocarbon reserves in the world. Venezuela also has 150 e12cuft of natural gas reserves. The crude oil PDVSA extracts from the Orinoco is refined into a fuel eponymously named 'Orimulsion'.[12]
PDVSA has a production capacity, including the strategic associations and operating agreements, of 4 Moilbbl per day (600,000 m3). Officials say production is around 3.3 Moilbbl/d although most secondary sources such as OPEC and the EIA put Venezuela's output at least 500000 oilbbl/d lower.
During the presidency of Hugo Chávez the organization's payroll tripled, while oil production fell steeply, a drop of 700,000 barrels per day. Soaring oil prices began in 2002 and peaked in 2008 at $147 per barrel.
Politicization
In 2002, many PDVSA employees went on strike against the policies of Chávez, who in response fired over 19,000 workers from the company. As of 2014, Intevep, the research and development arm of PDVSA, reportedly lost 80% of its workers, severely damaging PDVSA's ability to innovate and compete in the global petroleum market.[13] PDVSA saw stagnant growth in the following era which was defined by a boom in oil prices. Between 2002 and 2012, incapacitating injuries to employees rose from 1.8 per million man hours to 6.2, extremely high compared to 0.6 per million man hours for Pemex in 2012, highlighting the company's struggle to optimize.[13] Several former PDVSA employees moved to Alberta, where the oil consistency was similar to that of the Orinoco. As a result, the number of Venezuelans in Alberta has risen from 465 in 2001 to 3,860 in 2011.[13] Other PDVSA workers migrated to Colombia, joined Ecopetrol, and were credited with helping the company attain huge profits throughout the 2010s.[13]
History
1970s: Nationalization
Under the presidency of Carlos Andrés Pérez, whose economic plan, "La Gran Venezuela", called for the nationalization of the oil industry, Venezuela officially nationalized its oil industry on 1January 1976 at the site of Zumaque oilwell 1 (Mene Grande). This was the birth of Petróleos de Venezuela S.A. (PDVSA). All foreign oil companies that once did business in Venezuela were replaced by Venezuelan companies, such as Lagoven (Standard Oil), Maraven (Shell), and Llanoven (Mobil).[12] Each of the former concessionaires was simply substituted by a new 'national' oil company, which maintained the structures and functions of its multi-national corporation (MNC) predecessor.[17] With the 1976 nationalization, each previous multinational operator was converted into an affiliate of PDVSA; these affiliates were grouped into an administrative structure underneath both PDVSA and the Venezuelan Ministry of Energy.[12]
Ownership of Citgo
In 1986, PDVSA bought 50% of the United States gasoline brand Citgo from Southland Corporation and in 1990 the remaining half.[53] With full ownership of Citgo, PDVSA at its peak controlled 10% of the US domestic oil market, creating a lucrative export chain from Venezuelan soil to American consumers,[18] as the two largest buyers of Venezuelan petroleum are the United States and China, respectively.[54]
In 2013, despite dwindling performance, PDVSA was able to add Russia's Rosneft as an extraction partner, anticipating to extract 2.1 million barrels of petroleum per day.[54] With the onset of the Crisis in Venezuela, the country borrowed 1.5 billion dollars from Russia, offering 49.9% of PDVSA's share in Citgo as collateral.[55]
Safety
There have been worsening safety problems since 2003,[6] culminating in a gas leak at the Paraguaná Refinery Complex in August 2012 which caused an explosion, killing 48 people and damaging 1600 homes.[61] A lightning strike caused a fire at the in September 2012.[62]
Organization
Board of directors
The Board of Directors of PDVSA "is the administrative body of the Corporation, with the broadest powers of management and disposal, without other limitations than those established by law and the social bylaws of PDVSA". It is responsible for preparing and presenting operational and financial reports, as well as formulating and implementing the company's operational, economic, financial, and social strategies.[63]
The current board of directors was appointed by Presidential Decree No. 4.846 published in Extraordinary Official Gazette No. 6760 of August 28, 2023 and is composed of:[64][65]
- Pedro Rafael Tellechea Ruiz - President of PDVSA
- Héctor Andrés Obregón Pérez - Executive Vice President
Overseas assets
PDVSA has offices in Argentina, Bolivia, Brazil, Colombia, China, Cuba, Spain, the Netherlands, Guyana, Jamaica, Puerto Rico, Somalia, Honduras, Morocco, Canada, Hong Kong, Taiwan, Reunion, Gibraltar and Malta.[69]
- Citgo Petroleum Corporation, United States – Citgo is 100% owned by PDVSA.
- Nynäs Petroleum, Sweden – PDVSA owns a 50% stake with Finland's Neste Oil Oyj holding the other 50%.
- BOPEC, Bonaire petroleum corporation 100% owned by PDVSA.
See also
- Deltaven
- Corporación Trebol Gas C.A.
- History of the Venezuelan oil industry
- Petrocaribe
- Nervis Villalobos
External links
References
- Venezuela appoints alleged drug trafficker El Aissami as oil minister Reuters, 2020-04-27, retrieved 2018-04-28^
- Venezuela's PDVSA oil revenue tumbles amid lower prices, production Reuters, 12 August 2017, retrieved 13 March 2018^
- PETRÓLEOS DE VENEZUELA, S.A. AND SUBSIDIARIES (PDVSA)