Archive for May 26th, 2011

Chavez shakes up PDVSA’s Board

May 26, 2011

In a surprise move, President Chavez shook up the Board of Venezuela’s oil company PDVSA. Chavez removed half of the Board, including many long time members during Chavez. But the name that jumps out the most is that of PDVSA’s CFO Eudomario Carruyo, who was responsible for the Pension Funds that invested close to half a billion dollar in a fund that turned out to be a Ponzi scheme and was managed by a former consultant to PDVSA. Carruyo washed his hands in the matter and the company President said he will replace the missing funds.

Others removed from the Board were the internal Director for Production Luis Pulido, the Head of the Gas Division Carlos Vallejo, Planning Director Fadi Kabboul and Research Director Hercilio Rivas. Pulido and Kabboul had also been involved in scandals in the past, including the rotten food scandal, but appeared to be untouchable.The new internal members are Victor Aular, Jesus Luongo, Orlando Chacin, Ower Manrique and Willis Rangel (from the union)

Curiously, Gral. Aref Richany, President of the Government’s weapons manufacturer CAVIM, which was also included in the sanctions by the US State Department, was also removed from the Board. As I have suggested, the CAVIM sanction was a message to the Venezuelan Government and it was clearly understood.

As external members Chavez named Foreign Minister Nicolas Maduro and Planning and Finance Minister Jorge Giordani. This indicates that Giordani continues to have the ear of the President and he is likely to impose more control over the oil company’s finances and debt issuing now that he is on the Board.

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