Venezuelan President Nicolas Maduro on Sunday tapped a National Guard major general to lead state oil company PDVSA and the Oil Ministry as the OPEC member labors under near 30-year lows in oil production. Industry analysts and sources said the surprise appointment of Manuel Quevedo, a former housing minister with no known energy experience, was a bad omen for the country's already deteriorated oil industry. Quevedo takes over from two industry veterans to become one of the most powerful players in the country, which is home to the world's largest crude reserves. He will have to tackle corruption scandals and an attempted debt restructuring, within the context of a deep recession and debilitating U.S. sanctions.
"The time for a new oil revolution has come," leftist Maduro said in his televised Sunday address, urging Quevedo to purge PDVSA of corruption. Last week, six executives from U.S.-based Citgo Petroleum Corp, or Citgo, a Venezuelan-owned refiner and marketer of oil and petrochemical products, were arrested in Caracas on graft allegations. About 50 officials at state oil company PDVSA have been arrested since August in what the state prosecutor says is a "crusade" against corruption. Sources within PDVSA and the oil industry said Maduro's administration was using corruption allegations to sideline rivals and deepen its control of the industry, which accounts for over 90 percent of export revenue.
Quevedo, whom two sources close to the military identified as a Maduro ally, has taken over his new roles yesterday before he is officially sworn in on Tuesday. He vowed on Sunday to bring PDVSA closer to the ideals of late leftist leader Hugo Chavez.
"We're going to turn PDVSA into the sacred temple of the people!" tweeted Quevedo, who Maduro said would still dedicate 20 percent of his time to the "Grand Housing Mission," a Chavez-era project. It was unclear how Quevedo planned to increase oil production, or what position he would have in Venezuela's complex attempt to restructure its debt, although his appointment is likely to worry bondholders. Quevedo's rise also highlighted the increasing power of the Venezuelan military, which has gained clout in Maduro's Cabinet and in key industries like mining and food distribution.