On February 12, the Venezuelan government created the Compañía Anónima Militar de Industrias Mineras, Petrolíferas y de Gas [Anonymous Military Company for the Mining, Oil and Gas Industries] (CAMIMPEG), and placed the country’s mining, oil and natural gas industries directly under its control. The unexpected move was published in the Gaceta Oficial 40.845 dated February 12, 2016.
The repercussions of the move have yet to be fully understood, but there is serious cause for concern over what it means for the Venezuelan oil and natural resource industry. CAMIMPEG has been created to operate under the command of the Ministry of Defense, meaning that the the Venezuelan military now controls PDVSA.
CAMIMPEG’s executive board is made up of five individuals appointed by the Ministry of Defense who report directly to the head of the minister, Vladimir Padrino Lopez. The company is responsible for overseeing “all exploration, production and sale of hydrocarbons“ in the country, essentially exercising 100% control over Venezuela’s oil industry. The company is not required to report anything to either the Ministry of Oil and Mining or the National Assembly.
PDVSA Workers In the Dark Over Change of Leadership
Ivan Freites, the secretary general of the union representing oil workers in Falcon state, told El Nacional that Venezuela’s oil workers have been left in the dark about the recent change in their leadership. Freites said:
We don’t know what’s going to happen to PDVSA since this company has been created, or what will happen to its workers. What happens to the companies working in the Orinoco strip that have agreements with PDVSA? This is an extremely delicate situation
Freites said that PDVSA workers were particularly against the fact that the entirety of the Venezuelan oil exploration and production industry is now in the hands of military officers:
The military is the least capable of managing this industry. What can General Vladimir Padrino Lopez know about how to produce a barrel of oil? What does he know about how a refinery works, or how to administer investments in an oil installation? With all due respect, this industry requires qualified personnel.
Freities believes that by making the company accountable only to the Ministry of Defense, the goal of the government with the creation of CAMIMPEG is to make it impossible to audit PDVSA’s books. The move is particularly troubling because approximately 95% of Venezuela’s income comes from PDVSA.
Oil Industry “Falling to Pieces”
Jose Bodas, the secretary general of the Federacion Unitaria de Trabajadores Petroleros [United Federation of Oil Workers] said that the creation of CAMIMPEG could not have come at a worse time, since the country’s oil industry is “falling to pieces”. For Bodas, the move is nothing more than a “reward for political support” for Padrino Lopez.
Bodas provided as an example the country’s largest oil refinery, the Paraguana Central Refinery, which he claims is operating at 50% capacity due to a severe lack of maintenance to the facilities. Bodas said that the refinery lacks even safety equipment for the workers.
National Assembly to Investigate CAMIMPEG
The stealth creation of the company appears to have caught the National Assembly by surprise, but El Nacional reports that the body is preparing an investigation into the nature of the company. Opposition deputy Edgar Zambrano said:
We’re going to submit a written request for the judicial foundations of this company, its commercial registry and its scope, because all that we have is a decree [in the Gaceta Oficial] that doesn’t contain any details.
Power Outage Affects Caracas
Parts of Caracas’ east end experienced a prolonged power outage early this morning due to an issue at the El Rosal electrical substation. The outage affected Chacao, Chacaito, El Rosal, La Castellana, Altamira, Bello Campo and Los Palos Grandes, as well as several subway stations in he area.
In the mid-morning, Chacao mayor Ramon Muchacho said that at least 80% of the municipality was without electricity, including area schools and clinics.
NA Deputies Travel to NYC on Drug Trial Mission
An undisclosed number of opposition deputies are scheduled to travel to New York City in early March on a fact-finding mission regarding the drug trafficking trial of Cilia Flores’ nephews, Efrain and Franqui Flores. The first lady’s nephews were arrested by DEA agents in Haiti on November 10 for allegedly organizing a drug smuggling operation that would have transported 800 kilograms of cocaine into the United States. The two men had traveled to Haiti on diplomatic passports.
Opposition deputy Juan Montoya told Miami Diario that the trip was important because it is imperative to investigate whether or not drug trafficking organizations have any links to the Venezuelan government, as well as how and why the two men – who do not work for the Venezuelan government in any capacity – had access to diplomatic passports.
BCV Ready to Print Bs. 500, Bs. 1,000 Bills
The Banco Central de Venezuela will soon begin printing Bs. 500 and Bs. 1,000 bills in order to attempt to make paper transactions easier for Venezuelans. The highest denomination bill in circulation at the moment is the Bs. 100 bill, but the fact that a 500 gram bag of coffee costs Bs. 640 makes it necessary for Venezuelans to carry dozens of bills if they plan to buy even the most relatively inexpensive items.
While the announcement has yet to be made official, Ultimas Noticias cites individuals inside the organization as saying that the BCV is also exploring the possibility of eliminating the Bs. 2 and Bs. 5 bills from circulation given their absolute lack of purchasing power.
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