Thursday, April 24, 2003

The New York Times

February 9, 2003
Venezuelan Oilman: Rebel With a New Cause

ARACAS, Venezuela, Feb. 8 - He wears pastel-colored suits and wire-rimmed glasses. His thinning hair is neatly combed. Restrained and a little stiff, he speaks in the dry tones and jargon-filled language of a technocrat on such obscure topics as 1958 American oil regulations or 1930's energy policies in Venezuela.

In short, he looks and sounds every bit the oil executive he is - the president of one of the largest, most complicated and, these days, most embattled companies in the world, Petróleos de Venezuela.
But make no mistake, Alí Rodríguez still sees himself as a revolutionary. His boss, after all, is President Hugo Chávez, whose sharp tongue and efforts to remake Venezuelan society have left the country deeply divided and on the edge of economic collapse.

Though his résumé makes no mention of it, Mr. Rodríguez has leftist, some would say radical, credentials. For 20 years, he was a clandestine agitator and a fighter in a Cuban-inspired rebel movement, where he specialized in political proselytizing and making bombs, according to former guerrilla comrades.
"I am still a revolutionary, of course," said Mr. Rodríguez, 64, who remains a member of a party, Fatherland for All, on the left fringe of the government's coalition. "But it is under different conditions, in accordance with the realities of the day."

The irony of how the son of a humble Andean farmer became an idealistic guerrilla and, years later, rose to the upper echelon of a widely hailed company makes Mr. Rodríguez shake his head and smile. To be sure, he does not seem entirely comfortable poring through planning documents, but though he does not carry a rifle anymore, he still says he is fighting to shake up the system for the betterment of the poor.

Still, the reality is that today's rebels are his former oil executives. For more than two months they have been out in the streets protesting against Mr. Chávez and, by extension, Mr. Rodríguez's management of Petróleos de Venezuela S.A.

Indeed, thousands of Petróleos workers helped to topple Mr. Chávez for a few days in April, and then gave backbone to a national strike of several weeks that strangled oil exports to Venezuela's main customer, the United States.
Mr. Rodríguez may have once believed in hemispherewide revolution. But these days, as he looks out from his penthouse office, he sounds more like an unforgiving capitalist. He vows that the thousands of dissident workers who went on strike - and continue to strike - will never return to their jobs.
"Their movement seriously damaged the company and the country," Mr. Rodríguez said, his ire just slightly shaking his calm demeanor. "That is why I am indignant at what happened, because it makes our work so much harder. We have to reduce investments, and that means a loss of possibilities, a retreat for the country."

"There is no possibility of an amnesty whatsoever," he added.
Petróleos de Venezuela, once valued at $110 billion, is producing just half what it did before the strike, which ended in the non-oil sector last week after 63 days. Moribund oil fields are sanding up, losing the ability to produce oil; the company's reputation is in shambles; and the 9,000 workers Mr. Rodríguez has fired represent a loss of experience and skill.

Whether to take back striking workers is one of the critical decisions Mr. Rodríguez has made as he tries to guide Petróleos de Venezuela through venomous political waters into uncharted territory.
To his left are hard-liners in the governing party who believe Mr. Rodríguez was too lax in purging dissenters and too close to the global oil industry to be of much use to Mr. Chávez's reforms.
To his right are those who accuse him of allowing ideology to cloud logic, resulting in a scaled-down company that will generate far less wealth than before.

Those who know him see Mr. Rodríguez as independent, decisive and clear on how to reshape the company. He has a plan to break the company into eastern and western divisions, making the Caracas headquarters, where dissidents planned antigovernment walkouts, obsolete. He proposes reducing the company's scope, possibly selling off refineries and other assets overseas.

Mr. Rodríguez insisted that Venezuela would soon export as much petroleum as before the strike, about 2.7 million barrels a day, most to the United States. He suggested that as demand grows in the years to come, so would Venezuelan supply.

But the company he envisions would also conform more to Mr. Chávez's vision, to generate a steady stream of revenues for social programs. It would also continue forging ties with the Organization of the Petroleum Exporting Countries.
"I think that effectively, at least culturally, the true nationalization of petroleum is coming," Mr. Rodríguez said recently, though he emphasized that foreign companies would continue to operate here. The role of a company that controls such riches, he said in an interview, is to "incorporate that value of the natural resource for the maximum benefit."

But getting the company back to where it once was will be difficult - some say impossible - even for a longtime oilman who served as president and general secretary of OPEC before taking over the Venezuelan company last April.
"It is hard to see the company overcome this quantitative and qualitative setback," said Mazhar al-Shereidah, an oil economist who helped write oil regulations for the Chávez government. "He is not in charge of a healthy company. They are giving him a company, a body, that is in intensive care."
The company's 2003 budget is being cut by $2.7 billion, to about $6 billion, to offset the slide in revenue. Mr. Rodríguez acknowledges that investments that are crucial for exploration are being cut by 30 percent.

If he is strained by the Herculean task ahead, Mr. Rodríguez does not seem to show it. He has learned to be resilient.
"As I have said, everything you do as human beings, is a step forward," he explained. "You learn from the hard knocks, while someone who does not go through it might not find it so easy."
The hard knocks came in the 1950's when Mr. Rodríguez was a student agitator fighting against the strongman Marcos Pérez Jiménez. Even after Pérez Jiménez was overthrown in 1958, Mr. Rodríguez said he continued in the Venezuelan underground, pressing for change.

Accused of having detonated a fatal bomb blast, which he denies, Mr. Rodríguez fled into the mountains in 1964 and joined others intent on toppling the government. Former fellow fighters remembered Comandante Fausto, as he was known, as shrewd and tireless, excelling in combat and political work and spending his free time listening to classical music.

"He could move in any scenario," said Alberto Tirso, 61, a former comrade who now opposes the Chávez government. "He was a man of valor, very serene, a great reader. I remember he always carried four or five books in his knapsack."
But the revolution never caught on, and in 1979 Mr. Rodríguez was one of the last rebels to demobilize under a government amnesty. He became a lawyer and won a seat in the lower house of Congress where his interest in oil blossomed, leading to the chairmanship of the energy committee. When Mr. Chávez was elected president in 1998, he became minister of mines and energy.
"I have had the good fortune of being in different situations that have to do with petroleum," he said. "And now it is as an entrepreneur, a role I had never thought I would play in my life."

February 9, 2003
Venezuela's Oil Industry and the Strike
he strike has reduced Venezuela's oil capabilities.
Oil produced, total:
3.1 million barrels a day before the strike.
1.3 million now, say dissidents. The government says the figure is 1.9 million.

Oil exported:
2.7 million barrels a day before the strike, most to the U.S.
700,000 barrels now, according to Mines and Energy Ministry.

Work force:
33,000 full-time employees before the strike, and 37,000 contract workers, which fluctuated.
Unclear how many now, but 9,000 of the full-time workers have been fired.
Gasoline produced for home market:
250,000 barrels a day before strike.
150,000 barrels now, the Mines and Energy Ministry says.
Gross oil revenues:
2002 (estimated) $22.2 billion.
2003 (forecast) $14.3 billion, according to UBS Warburg.