General named to head debt-ridden oil company

pulse

November 26, 2017 9:36 PM

Maduro announced on state television that he had named Major General Manuel Quevedo of the National Guard as oil minister and president of PDVSA.

Venezuelas President Nicolas Maduro on Sunday named a general to head debt-ridden PDVSA and ordered a "total restructuring" at the state oil giant, in a move that emphasized military support for his regime.

The Guard, under Quevedo, played a key role in subduing violent anti-Maduro protests in 2014.

His appointment came alongside Maduro's naming of Captain Jose Vielma Mora as foreign trade minister, expanding the military presence in his government.

At least one-third of the cabinet is made up of active or retired officers, and the military has become a major pillar of support for the widely unpopular socialist leader.

"We are going for a total restructuring of PDVSA," Maduro said during his weekly show on official VTV television.

PDVSA accounts for about 95 percent of the country's export earnings.

Quevedo, formerly minister of housing, replaces Nelson Martinez at the helm of PDVSA and Eulogio del Pino as oil minister.

Struggling with corruption

The move comes only days after PDVSA and Venezuela were declared in selective default for failing to meet payments on certain bonds in time.

The company's bonds represent 30 percent of a Venezuelan external debt estimated at $150 billion, which Maduro has been seeking to renegotiate.

The company has been in steep decline for years, with production falling to 1.9 million barrels a day currently, from 2.6 million last year and 3.2 million in 2008.

That decline -- attributed partly to low investment in infrastructure -- combined with the worldwide drop in oil prices has plunged the country into crisis.

Maduro on Sunday set increased production as a top priority.

With barely $10 billion in its hard currency reserves, Maduro's socialist government has been fighting to stay afloat.

The prolonged economic crisis has brought crippling shortages of food, medicine and industrial inputs, fueling inflation which at 1,000 percent is the world's highest -- and the International Monetary Fund projects could exceed 2,300 percent next year.

PDVSA is also struggling with alleged corruption.

On Tuesday, the government arrested six executives of PDVSA's Houston-based affiliate, Citgo, for allegedly signing contracts to refinance $4 billion in debt without government approval.

The government alleges that a $50 million bribe was paid as part of that deal.

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