Venezuela’s crumbling oil industry looks set for more political turmoil. Oil minister and PDVSA CEO Manuel Quevedo may be on the outs, as President Nicolas Maduro is preparing a cabinet shuffle that could put a new ally in charge of the country’s lifeblood industry, sources close to the situation told S&P Global Platts. Quevedo, a former brigadier general in the National Guard with no previous experience in oil, has overseen widespread fuel shortages and a continued deterioration of Venezuela’s crude production to six-decade lows in his 13 months in charge of the ministry and PDVSA.
With Maduro facing mounting pressure from international creditors and sliding oil prices further imperiling Venezuela’s already crippled economy, Quevedo could be scapegoated and sacked when the president is inaugurated for his second six-year term January 10, the sources said. But any successor is unlikely to do much better — if at all — given the entrenched corruption and mismanagement within state oil company PDVSA, not to mention its crushing debt, decaying infrastructure and shortage of technical experts, many of whom have left or been purged. Some 98% of the country’s export revenues come from oil.
“Venezuela was barely surviving at $80/b, and we can cross it out at $50/b,” said Olivier Jakob, an analyst with consultancy PetroMatrix. Venezuela, which sits on the world’s largest proven oil reserves, pumped 1.17 million b/d in November, according to the latest S&P Global Platts OPEC survey, down 630,000 b/d year on year and 900,000 b/d in two years. Few of the rumored candidates bring any industry expertise, making a turnaround unlikely, barring a significant sell-off or farm-out of oil assets to outside companies.
Close Maduro ally Jorge Rodriguez, the minister for communication and information and the brother of current Vice President Delcy Rodriguez, is a leading candidate to replace Quevedo. But powerful lawmaker Diosdado Cabello, who chairs the Maduro-stacked Constituent Assembly, is said to favor Guillermo Blanco Acosta, PDVSA’s vice president of refining, sources said on condition of anonymity.Politician Jose Vielma Mora and former Central Bank President Nelson Merentes have also been mentioned as possible successors, according to the sources.