Venezuela's Guaido Is Said to Announce PDVSA Board This Week
(Bloomberg) -- Venezuela’s Juan Guaido, the National Assembly president who is building a parallel government structure as he battles for control of the country with President Nicolas Maduro, plans to announce a new board for state oil company Petroleos de Venezuela SA by the end of the week, according to people with knowledge of the plans.
Gustavo Baquero, an oil engineer, will be named president of PDVSA, as the energy company is known, according to the people, who asked not to be named since the plans aren’t yet public. Executives will also be named to run the PDVSA board and Citgo Petroleum, the country’s U.S.-based refining unit which has been banned from sending dividends back to Maduro’s autocratic regime due to sanctions.
Lawmakers at the National Assembly are expected to vote on the potential board members during a session in Caracas on Wednesday while the announcement on Baquero is more likely for Friday, the people said.
While Maduro continues to rule over Venezuela’s institutions, PDVSA and armed forces, Guaido is attempting to whittle away at his control of foreign assets with the support of the U.S. and more than 30 countries which have recognized him as the legitimate leader of Venezuela following a fraudulent election won by Maduro last year. It’s not yet clear how Guaido would ultimately gain the keys to PDVSA’s headquarters or control over production at home unless Maduro were pushed out and the opposition were to win new elections, but a path to controlling Citgo seems more plausible despite legal challenges and few precedents.
“All legal decisions are being done following Venezuelan laws and we expect that the U.S. government will recognize PDVSA’s and Citgo’s new executives and officials,” said Yon Goicoechea, a close ally of Guaido who is leading a team focused on the energy sector.
The officials who will be named are all currently living outside Venezuela to prevent them from being detained by the government, the people said. Some former PDVSA workers have been receiving calls from Guaido’s team to see whether they’d be willing to return to the company. Many oil executives and engineers left or were fired around the time of a crippling two-month oil strike that ended in 2003.
Oil Industry
Venezuela’s oil industry, the lifeblood of an economy in distress, is the key to any rebuilding effort if Guaido’s attempts at pushing Maduro out of power are to succeed. Production has collapsed in recent years and sanctions currently hinder crude exports to the U.S. -- Venezuela’s biggest market -- forcing current PDVSA officials to seek alternative markets in a hurry to keep the revenue flowing.
Maduro, who decries the developments this year as being akin to a coup orchestrated by the U.S. with Guaido as a figure head, says he’ll defend Citgo through legal action. A handful of creditors are also lining up to stake a claim to Citgo to try to satisfy pending demands and debts.
The people who may be named to a Citgo board under Guaido include Angel Olmeta, a former Citgo chief operating officer in the early 1990’s, Luis Urdaneta, a former vice president at PDVSA, and Edgar Rincon, a former McKinsey & Co consultant in Venezuela and currently a vice president at Houston-based Nabors Industries, a land-drilling contractor, according to people familiar with the plans.
Citgo’s vice president of refining, Art Klein, and the vice president of compliance and chief strategy officer Rick Esser, both currently on the board, are also being considered by Guaido, the people said. The final decision on the names for the PDVSA and Citgo boards will be taken in the coming days.
Citgo declined to comment on the board appointment. Urdaneta, Olmeta, Rincon and Klein didn’t immediately return LinkedIn messages and Esser didn’t immediately return a call seeking comment after normal business hours.
The appointment of four board members for Citgo by the Guaido team was first reported by Reuters.
©2019 Bloomberg L.P.