Venezuelan oil strike ends, Chavez names new PDVSA president

Oct. 16, 2000
Hours after a labor-management agreement ended a massive strike that almost brought Venezuela�s oil industry to a halt, President Hugo Chavez announced on Sunday a restructuring of state oil corporation Petroleos de Venezuela SA and, in a surprise move, named an army general to the helm of the company.

CARACAS�Hours after a labor-management agreement ended a massive strike that almost brought Venezuela�s oil industry to a halt, President Hugo Chavez announced on Sunday a profound restructuring of state oil corporation Petroleos de Venezuela SA (PDVSA) and, in a surprise move, named an army general to the helm of the company.

President Chavez, who departed on Sunday for a tour of PDVSA subsidiaries in Houston, Tulsa, and Lake Charles, appointed Gen. Guaicaipuro Lameda Montero as the third president of PDVSA in less than 2 years, replacing Hector Ciavaldini.

Chavez did not specify his reasons for removing Ciavaldini, saying only that "an in-depth restructuring" of the state oil corporation was underway.

In a terse reference to the outgoing PDVSA president, Chavez said, "a warm embrace and thank you, Hector."

Ciavaldini, who had been serving as PDVSA president since September last year, was the second person to head the corporation since Chavez took office in February 1999. Ciavaldini�s predecessor was Roberto Mandini, a former Citgo Petroleum Corp. vice-president.

"I have placed my sight on PDVSA thanks to the workers, and we will begin today with the (company�s) presidency," said the Venezuelan president during his weekly Sunday radio talk show "Hello, President."

"What we want to do is to strengthen PDVSA and place it in first place," said Chavez.

PDVSA-labor deal
Chavez� announcement came only hours after PDVSA management and oil industry unions reached an agreement late Saturday night on wage increases of a new collective labor contract that brought an end to a 4-day strike by oil workers, the worst labor conflict since Chavez took office.

Under the agreement, oil industry workers will receive an immediate wage increase of approximately $7.20/day and an additional $1.40/day effective Feb. 1, 2001. Additionally, PDVSA will pay its workers a special one-time bonus of $3,612.

Oil unions originally had demanded a daily wage increase of $9/day on top of the current minimum wage of $14/day.

Based on the agreement, labor leaders ordered workers to return to their jobs immediately. The new collective labor contract is to be signed Oct. 20.

Energy and Mines Minister Al�odr�ez Araque said the 4-day strike did caused no major losses to Venezuela�s oil industry because the company had taken the necessary precautions to meet domestic and international commitments.

Venezuela "did not fail to distribute one single barrel of oil" to its clients, said Rodr�ez Araque.

PDVSA, which had labeled the strike "illegal," said its operations had returned to normal thanks to the agreement.

Once oil workers began the strike last Wednesday, PDVSA put in place a contingency plan under which automated operations, senior company employees, and non-unionized personnel kept export terminals and refineries running, thereby minimizing the impact of the strike.

By Friday, however, the situation appeared to take a turn for the worse on reports of gasoline shortages in some regions of the country after striking workers blocked the entrance to some gasoline distribution centers, refineries, and terminals in the western state of Zulia, Venezuela�s main oil producing region.

Additionally, the country�s largest public-sector workers union threatened to call a nationwide strike of its affiliates in support of the oil workers.

On Sunday, Chavez praised "the happy ending" to the labor conflict and called on oil industry workers "to increase efficacy and efficiency and reduce costs."

Noting that the state oil corporation had incurred debts in senseless spending and unlimited squandering, the Venezuelan president said every bolivar (the Venezuelan currency) obtained from the sale of oil "does not belong to PDVSA. It belongs to all Venezuelans."

"I myself am reviewing things at PDVSA with a magnifying glass. The (labor) conflict has opened my eyes in that regard and I thank PDVSA workers," said Chavez, adding that from the beginning of his government he had been working to reduce excessive and unwarranted PDVSA spending.

"There is still much to be done," said the Venezuelan president.

Lameda Montero appointed head of PDVSA
Thanking the outgoing PDVSA president for his service, Chavez said a new stage has opened in the oil industry "with Gen. Guaicaipuro Lameda Montero at the helm of Petroleos de Venezuela."

Shortly after Chavez took office as president, he appointed Lameda Montero as head of the government�s Central Budget Office.

Lameda Montero, who graduated in military arts and sciences and is also an electrical engineer, accompanied Chavez on his trip to Houston and Tulsa, where another Venezuelan army general will take over as the new president of PDVSA�s wholly-owned subsidiary, Citgo Petroleum Corp.

Gen. Oswaldo Contreras Maza, a nuclear engineer who previously served as PDVSA vice president responsible for human resources, recently was appointed by Chavez to replace David J. Tippeconnic at the helm of Citgo (OGJ Online, Oct. 10, 2000).

During an interview with the local newspaper El Universal on Sunday, Contreras Maza said it was "premature" to talk of a possible restructuring of Citgo or removal of personnel.

"Obviously, when one assumes a post, one makes some adjustments and that is part of the process that is going to occur in the coming months. But Citgo is a company that is functioning today, that has excellent workers and I do not see why I would begin removing people," said Contreras Maza, adding that "Citgo workers should feel comfortable with labor stability."

He also noted that "all contracts" that Citgo currently holds with PDVSA "will be evaluated from the point of view of its profitability and benefits."

"We are well advanced in the process of evaluation, but we have to make decisions," said the new Citgo chief, adding "there will be adjustments, revisions, corrections of some errors that were made in the past."