Petróleos de Venezuela, S.A. (PDVSA, ; English: Petroleum of Venezuela) is the state-owned oil and gas company of Venezuela. It has activities in exploration, production, refining and exporting of oil, as well as exploration and production of natural gas. Since its founding on January 1, 1976, with the nationalization of the Venezuelan oil industry, PDVSA has dominated the petroleum industry of Venezuela, one of the world's largest oil exporters.

Oil reserves in Venezuela are the largest in the world, and the state-owned PDVSA provides the government of Venezuela with substantial funding resources. Following the Bolivarian Revolution, PDVSA was mainly used as a vital source of income for the Venezuelan government. Profits were also used to assist the presidency, with funds directed towards allies of the Venezuelan government. at least US$11 billion was stolen between 2004 and 2015. Jorge Giordani, the minister of planning until 2014, estimated that $300 billion was simply stolen. In 2018, thousands of workers left PDVSA, especially after the company was put under military control.

Reserves and capacity

250px|thumb|left|PDVSA Gas, [[Isla de Margarita]]

As of 2003, Venezuela had of conventional oil reserves according to PDVSA figures, the largest in the Western Hemisphere and making up approximately half the total. This puts Venezuela as fifth in the world in proven reserves of conventional oil. By also including an estimated of tar-like extra heavy crude oil in the Orinoco Belt region, Venezuela claims to hold the largest hydrocarbon reserves in the world. Venezuela also has of natural gas reserves. The crude oil PDVSA extracts from the Orinoco is refined into a fuel eponymously named 'Orimulsion'.

PDVSA has a production capacity, including the strategic associations and operating agreements, of per day (600,000 m<sup>3</sup>). Officials say production is around although most secondary sources such as OPEC and the EIA put Venezuela's output at least lower.

During the presidency of Hugo Chávez the organization's payroll tripled, while oil production fell steeply, a drop of 700,000 barrels per day. Soaring oil prices began in 2002 and peaked in 2008 at $147 per barrel. PDVSA saw stagnant growth in the following era which was defined by a boom in oil prices. Between 2002 and 2012, incapacitating injuries to employees rose from 1.8 per million man hours to 6.2, extremely high compared to 0.6 per million man hours for Pemex in 2012, highlighting the company's struggle to optimize. In 2012, PDVSA focused in hiring only supporters of the president and PDVSA revenue was used to fund Venezuela's socialist revolution.

History

1970s: Nationalization

Under the presidency of Carlos Andrés Pérez, whose economic plan, "La Gran Venezuela", called for the nationalization of the oil industry, Venezuela officially nationalized its oil industry on 1January 1976 at the site of Zumaque oilwell 1 (Mene Grande). This was the birth of Petróleos de Venezuela S.A. (PDVSA). All foreign oil companies that once did business in Venezuela were replaced by Venezuelan companies, such as Lagoven (Standard Oil), Maraven (Shell), and Llanoven (Mobil). With the 1976 nationalization, each previous multinational operator was converted into an affiliate of PDVSA; these affiliates were grouped into an administrative structure underneath both PDVSA and the Venezuelan Ministry of Energy. and promptly took advantage of their newfound expertise. Within 25 years of nationalization, PDVSA would become the largest company in Latin America and the tenth most profitable in the world.

! rowspan=2 | Petroven operating company !! colspan=2 | Former principal concessionaire !! rowspan=2 | Wells drilled !! colspan=3 | 1,000 barrels per day

|-

! Company !! Owned by / Affiliation !! Crude oil !! Refined !! Refinery capacity

|-

| Amoven || Amoco Venezuela Oil Co || Standard Oil of Indiana || 13 || 24

|-

| Bariven || Sinclair Venezuelan Oil Co || Atlantic Richfield Co || || 19 || 30 || 45

|-

| Boscaven || Chevron Oil de Venezuela S.A || Standard Oil of California || || 22 || 32 || 61

|-

| CVP || CVP || Government of Venezuela || 36 || 60 || 15 || 25

|-

| Deltaven || Texaco Maracaibo Inc || Texaco || 7 || 60 || 2 || 10

|-

| Guariven || Soc. Anonima Petrolera Las Mercedes || Venezuelan investors || 7 || 2 || ||

|-

| Lagoven || Creole Petroleum Corp || Exxon Corp || 132 || 1,004 || 425 || 740

|-

| Llanoven || Mobil Oil Co de Venezuela || Mobil Oil Corp || 7 || 67 || 88 || 106

|-

| Maraven || Cia. Shell de Venezuela Ltd || Royal Dutch/Shell Group || 10 || 531 || 259 || 404

|-

| Meneven || Mene Grande Oil Co. C.A || Gulf Oil Corp || 109 || 364 || 127 || 159

|-

| Palmaven || Venezuela Sun Oil Co || Sun Oil Co || 8 || 104 || ||

|-

| Roqueven || Phillips Petroleum Co || Phillips Petroleum Co || 6 || 36 || 5 || 4

|-

| Taloven || Talon Petroleum Co. C.A || Venezuelan investors || 3 || 3 ||

|-

| Vistaven || Mito Juan Concessionaria de Hidrocarburos C.A || Venezuelan investors || || 2 ||

|-

| Total || colspan=2 | || style="text-align: right" | 333 || 2,294 || 984 || 1,554

|}

1980s–1990s: Apertura

In the 1990s, Venezuela opened the company to global cooperation. The opening up of the Venezuelan oil industry, or Apertura, was initialized with a Venezuelan Supreme Court decision which removed older laws prohibiting cooperation with multi-national corporations on Venezuelan land. From 1993 through 1998, PDVSA split extraction rights with multiple multi-national companies in special arrangements called "strategic associations", in effect trading Venezuelan crude oil for the efficiency that came from outside expertise and technology. These "strategic associations" were controversial: Venezuela was able to maximize profits at the cost of lenient taxation on the multinational companies and the loss of control over domestic resources. With Chávez's election in 1998, Venezuela's attention became increasingly focused on complying with OPEC. As oil prices collapsed in the late 1990s, however, keeping the special arrangements while conforming to OPEC regulations became impossible, leading to an end of the Apertura arrangements for Venezuela. In 1998, PDVSA produced 3.4 million barrels of oil a day and had 40,000 employees. By law, it deposited its revenues in the sovereign fund accounts in the Central Bank of Venezuela.

2000–2010: Social spending

thumb|right|Filling station in Venezuela of PDV (a subsidiary of PDVSA)

In December 2002, the Venezuelan general strike of 2002-2003 saw many of PDVSA's managers and employees, including the CTV trade union federation, join to pressure Venezuelan president Hugo Chávez to call early elections, and virtually stop oil production for two months. Nearly 19,000 employees, most of them seasoned professionals, were summarily dismissed, and production resumed with employees loyal to the government. The International Labour Organization (ILO) called on the Venezuelan government to launch "an independent investigation into allegations of detention and torture," surrounding this strike. The company has since formed its own militia, which all employees join on a voluntary basis, to ward off a potential "coup" by the government. It considers itself virtually indistinguishable from the state, its social programs more or less running the country's "socialist revolution".

In 2005, PDVSA opened its first office in China, and announced plans to nearly triple its fleet of oil tankers, to 58. In April and May 2005, PDVSA, per an agreement signed between the governments of Venezuela and Argentina, sent 50 million tonnes of fuel oil to the latter to alleviate the effects of an energy crisis due to a shortage of natural gas.

In November 2005, PDVSA and its subsidiary in the United States, Citgo, announced an agreement with Massachusetts to provide heating oil to low income families in Boston at a discount of 40% below market price. Similar agreements were later set up with other states and cities in the US Northeast, including New York's Bronx, Maine, Rhode Island, Pennsylvania, Vermont and Delaware. Under the program, Citgo offered a total of around of heating oil at below market prices, equivalent to a discount of between 60 and 80 cents a gallon.

On July 28, 2006, credit ratings agency Moody's Investor Service said it was removing its standalone ratings on PDVSA because the oil company did not provide adequate operational and financial information. As of 2019, PDVSA had still not filed its 2004 financial results with the US Securities and Exchange Commission that were due in June 2005.

During the 2000s, PDVSA carried out showcase projects in shanty towns and waste removal.

In 2008, PDVSA had been Latin America's largest company, but in 2009 it was overtaken by Petrobras and Pemex, according to a ranking of the region's top 500 companies from Latin Business Chronicle.

2007 expropriations

In 2007, PDVSA bought 82% percent of Electricidad de Caracas company from AES Corporation as part of a renationalization program. Subsequently, the ownership share rose to 93.62% by December 2008. Reaching a settlement with ExxonMobil proved difficult; Venezuela offered book value for ExxonMobil's assets, while ExxonMobil asked for as much as $12 billion. As of January 2012, this and the claims of ConocoPhillips remained before the World Bank's International Centre for Settlement of Investment Disputes.

In February 2012, PDVSA paid $255 million to ExxonMobil in compensation for nationalization of ExxonMobil's Venezuelan assets in 2007 and $420 million to be paid beginning in 2012 to US firms Williams Cos Inc. and Exterran Holdings, Inc for natural gas assets nationalized in 2009.

During the same time, oil executives and politicians siphoned off at least $11 billion. More than 24 Venezuelans linked to four corruption schemes amassed at least $273 million in 25 Credit Suisse accounts opened between 2004 and 2015.

2010s: crisis in Venezuela, corruption

In 2010, PDVSA loaned the government of Antigua $68 million to repurchase all remaining shares of West Indies Oil Company (WIOC) from Bruce Rappaport's National Petroleum Ltd.

In 2012, PDVSA announced that it would enter into a joint venture agreement with Eni SpA and Repsol in order to initiate a gas production project at the Cardon VI gas block in Venezuela. Production from this joint venture is estimated to reach between 80 and 100 million cubic meters of gas. In February 2014, PDVSA and the Anglo-French oil firm Perenco entered into talks for a $600 million financing deal to boost production at their Petrowarao joint venture. In October 2014, Venezuela imported its first ever ship of oil from Algeria so that they could dilute their oil.

Policies enacted by Chávez caused a crisis in Venezuela, with the nation's economy deteriorating greatly. Because of the hyperinflation and food shortage, paychecks have become all but valueless, leading to mass resignation from workers. By 2017, PDVSA could not even afford to export oil through international waters, which requires safety inspections and cleaning under maritime law, with a fleet of tankers stranded in the Caribbean Sea due to the issue. In addition, Nicolás Maduro fired the head of PDVSA and replaced him with Major General Manuel Quevedo, placating the military by giving them control of PDVSA.

Between 1999 and 2017, PDVSA earned an estimated $635 billion in revenue and produced an additional $406 billion worth of oil. Production dropped further, to half of its 1998 benchmark. Accountability for the funds was no longer required and Jorge Giordani, minister of planning until in 2014, estimates that $300 billion was simply stolen.

During the government of José Luis Rodríguez Zapatero, Raúl Morodo served as the Spanish Ambassador to Venezuela. In a legal case that garnered significant media attention, Morodo and his son, Alejo Morodo, admitted to receiving payments from the Venezuelan state oil company, Petróleos de Venezuela, S.A. (PDVSA), through "simulated operations." These payments were allegedly exchanged for fictitious consultancy and advisory services, amounting to at least €4.5 million. The Morodos utilized a network of companies—Aequitas Abogadosy Consultores Asociados, S.L., Furnival Barristers Corp, S.A., and Morodo Abogados y Asociados, S.L.—to facilitate these transactions, which were designed to defraud the Spanish tax authorities by creating the appearance of legitimate business operations. For example, in 2015, Roberto Enrique Rincon was arrested and in 2016 pleaded guilty to bribery and tax evasion in a scheme to secure energy contracts. In 2016, he was described as having built "36 maletín-based companies with intractable nested ownership structures". These actions violated the US's Foreign Corrupt Practices Act and were classified as conspiracy to commit money laundering.

In August 2017, President Donald Trump's administration imposed economic sanctions against PDVSA that restricted the industry's access to credit markets.

With the prospects of Maduro leaving power in early 2019 confidence saw an assessable increase in the nation, with tangible financial benefits like an increase in value of bonds for PDVSA, the country's major oil and gas company, which went up 5% in January 2019. According to Laura Gamboa Gutiérrez, Maduro was able to retain the military's support after they were given control of PDVSA allowing military leaders to personally profit from black market deals.

2020s

In 2020, Maduro created a committee to restructure PDVSA.

In September 2021, a U.S. trial began about PDVSA owing $150 million to Siemens Energy, which PDVSA said it could not pay because of U.S. sanctions.

By 2023, PDVSA had not paid bills for $21.2 billion; Maduro suspended the committee and replaced oil minister Tareck El Aissami with Pedro Rafael Tellechea. According to Attorney General Tarek Saab, 51 people were detained.

Ownership of Citgo

In 1986, PDVSA bought 50% of the United States gasoline brand Citgo from Southland Corporation and in 1990 the remaining half. With full ownership of Citgo, PDVSA at its peak controlled 10% of the US domestic oil market, creating a lucrative export chain from Venezuelan soil to American consumers,

In 2013, despite dwindling performance, PDVSA was able to add Russia's Rosneft as an extraction partner, anticipating to extract 2.1 million barrels of petroleum per day.

In October 2018, PDVSA paid $949 million on its Citgo backed bond to investors, a payment many analysts thought was impossible for the company given its recent liquidity struggles. The payment meant that PDVSA would continue to own Citgo, but failure to pay would result in Citgo transferring ownership to one of PDVSA's creditors. Losing Citgo would be disastrous for PDVSA, as they would lose the key terminal of their export chain to the US and the chemical additives necessary for oil refinery that Citgo produces. The loss would wreak additional havoc on Venezuela's economy, drying up the revenue stream that provides 90% of the government's hard-currency earnings. In April 2019 the next payment was due and at the time, PDVSA was completely insolvent, with the rest of their $60 billion debt. Canadian mining firm Crystallex was another creditor of PDVSA's Citgo holdings and could potentially end up in control should PDVSA default in 2020.

In January 2022, the US Treasury extended a rule to shield Citgo from being seized by creditors, and in April 2023 it extended it for another 3 months.

Safety

There have been worsening safety problems since 2003, A lightning strike caused a fire at the in September 2012.

Organization

Board of directors

The Board of Directors of PDVSA "is the administrative body of the Corporation, with the broadest powers of management and disposal, without other limitations than those established by law and the social bylaws of PDVSA". It is responsible for preparing and presenting operational and financial reports, as well as formulating and implementing the company's operational, economic, financial, and social strategies.

The current board of directors was appointed by Presidential Decree No. 4.846 published in Extraordinary Official Gazette No. 6760 of August 28, 2023 and is composed of:

  • Pedro Rafael Tellechea Ruiz - President of PDVSA
  • Héctor Andrés Obregón Pérez - Executive Vice President
  • Leyli Beatriz Ferrer Avendaño - Vice President of Planning and Engineering
  • Luis Enrique Molina Duque - Vice President of Exploration and Production
  • Gustavo Adolfo Boadas Díaz - Deputy Minister of Refining
  • Génesis Sabrina Ron Solano - Vice President of International Trade and Supply
  • Luis Miguel González Núñez - Vice President of Gas
  • Juan Carlos Díaz Socorro - Vice President of National Trade and Supply
  • Heyfred Jhoselin Segovia Marrero - Vice President of Finance of PDVSA
  • Ronny Rafael Romero Rodríguez - Vice President of International Affairs of PDVSA

Presidents of PDVSA

  • Pedro Rafael Tellechea Ruíz (January 2023 – present)
  • Asdrúbal Chávez (April 2020 – January 2023)
  • Manuel Quevedo (November 2017 – April 2020) Major general of the Bolivarian National Guard
  • Nelson Martínez (August 2017 – November 2017) BS in chemistry, MS in Physical Chemistry University of Poitiers, France. Ph.D. in Chemistry University of Reading, UK.
  • (September 2014 – August 2017) Exploration geophysics, Universidad Central de Venezuela
  • Rafael Ramírez (November 2004September 2014) Minister of Energy and Oil (2005), M.Sc. Energy policy &ndash; UCV, B.Sc. Mechanical Engineering &ndash; ULA.
  • Alí Rodríguez Araque (April 2002 – October 2004) Minister of Energy (1999), Secretary General OPEC (2001), Lic. Economics – UCV.
  • Gastón Parra Luzardo (February 2002 – April 2002) Academic Vice-Rector &ndash; LUZ (1980–1984), Dean of the School of Social Sciences &ndash; LUZ (1972–1975). Lic. Economics – LUZ.
  • Guaicaipuro Lameda Montero (October 2000 &ndash; February 2002) Brigadier General of the Venezuelan Army and Electrical Engineering, (University of the Pacific), M.Sc. economic planning.
  • Héctor Ciavaldini (August 1999 - October 2000
  • PDVSA acquired a minority stake in the Jamaican state-owned oil refinery in 2006.

PDVSA has offices in Argentina, Bolivia, Brazil, Colombia, China, Cuba, Spain, the Netherlands, Guyana, Jamaica, Puerto Rico, Somalia, Honduras, Morocco, Canada, Hong Kong, Taiwan, Reunion, Gibraltar and Malta.

Former

  • Hovensa LLC refinery, United States Virgin Islands &ndash; closed in 2015. Hovensa was jointly owned by PDVSA and Hess Oil Virgin Islands Corp.
  • Bahamas Oil Refining Company (BORCO), Bahamas &ndash; PDVSA was the sole owner of this oil storage terminal in the Caribbean until April 2008. The new owners were Royal Vopak (20%) and First Reserve Corporation (80%). It is doing business as Vopak Terminal Bahamas. They in turn sold the facility to Buckeye Partners in 2011.
  • Ruhr Oel, Germany &ndash; PDVSA was a 50% owner of Ruhr Oel GmbH, the other half belonging to BP's German unit Aral AG. PDVSA sold its part to Russia's Rosneft in October 2010.

See also

  • Deltaven
  • Corporación Trebol Gas C.A.
  • History of the Venezuelan oil industry
  • Petrocaribe
  • Nervis Villalobos

Notes