MARIANNA PÁRRAGA
EL UNIVERSAL

Oil opening ended finally in June 2007 upon expiration of the term afforded by the State under Directive 5,200 to private former operators in the Orinoco oil belt and the risk exploration and shared profits agreements to turn their businesses into joint ventures.

The so-called "migration to joint ventures" finished off a policy which fostered the direct involvement of the domestic and foreign private sector in the oil business and kicked off a new strategy, according to which businesses have a specific share, always hand in hand with state-run oil holding Petróleos de Veneuela (Pdvsa) and where geopolitical criteria take priority.

The balance of such process was not quite positive. Two renowned companies, Exxon Mobil and Conoco Phillips, terminated suddenly their business in Venezuela and left in Pdvsa hands the task of managing substantial projects, such as Ameriven, Cerro Negro, Petrozuata and Gulf of Paria.

However, as far as the energy-sector authorities are concerned, there was only a change of actors. Year 2007 witnessed the arrival in Venezuela of Iranian Petropars, Russian Lukoil and Gazprom, Belorussian Belorusneft, Malaysian Petronas, Argentinean Enarsa, Uruguayan Ancap, Bolivian YPFB, Ecuadorian Petroecuador and Cuban Cupet de Cuba. Almost all of them are state-run companies.

Year 2007 was appropriate also to expand the operations of China National Petroleum Corporation. This company is expected to engage in joint drilling of up to one million bpd of oil. Additionally, three refineries with a joint capacity of 800,000 bpd will be built in China. The partnership went as far as to create a USD 6-billion fund to back social and infrastructure projects in Venezuela.

Domestic market in the people's hands
Following the conversion in 2006 of the operational agreements into 21 joint companies managed by Pdvsa and takeover of the Orinoco oil belt and Gulf of Paria early this year, the state-run oil holding resolved, some months ago, to restructure the operations in the fuel domestic market in order to secure the State increasing share in distribution and marketing.

Procurement of most stocks in bottlers and distributors of liquefied petroleum gas Vengas and Tropigas was one of the moves taken on that direction. Lately, the transfer of about 147 PDV gas stations to the community power was announced. Probably this step will not be taken as fast as possible and as planned because the Constitution was not reformed at the end of the day.

Anyhow, Pdvsa intends to recover part of the operations assigned to the private sector during the opening of the fuel domestic market, including procurement and operation of its own fleet of gasoline and LPG carriers, setup of a dozen liquefied gas filling stations and partnerships with the community power for management of gas stations and delivery of gas cylinders to residential end users.

The executing arms of most of such policies are the seven Pdvsa non-oil subsidiaries that were organized this year: Pdvsa Agrícola, Pdvsa Gas Popular, Pdvsa Servicios, Pdvsa Industrial, Pdvsa Ingeniería y Construcción, Pdvsa Naval and Pdvsa Desarrollo Urbano.

These companies will enable the holding to conduct outreach activities. Even though such activities have been subject to widespread criticism for being far away from the oil business, the Pdvsa board advocates them as one of their principal missions.

Translated by Conchita Delgado
cdelgado@eluniversal.com

Read the special feature on the Migration of oil partnership to joint ventures at:

http://economia.eluniversal.com/fajao_mopjv.shtml