PDVSA Adds More Workers After Nationalizations

Venezuela Oil Minister, Rafael Ramirez
(Click to Enlarge)

CARACAS (Dow Jones Newswires), Jul. 22, 2009

Venezuela is nearing its target of "liberating" 8,000 oil workers from recently nationalized private companies and hiring them to work for the state-run oil company under the umbrella of socialism, the oil minister said.

Speaking Wednesday, Rafael Ramirez said 6,900 former employees of private local and foreign companies are now on the payroll of state-run Petroleos de Venezuela, PdVSA.

Venezuela has nationalized 74 local and foreign oil-services companies this year and seized their assets, adding to other nationalizations in the oil sector in previous years. By rehiring many of the employees from the private sector to work for PdVSA, the company's payroll has ballooned to around 80,000 workers.

That figure is about double what it was when President Hugo Chavez took office in 2001. Analysts warn this is putting severe pressure on the financial health of PdVSA, especially given the drop in oil prices.

But Ramirez said the company is reorganizing to increase efficiency.

"Costs are being reduced in a process that has had no problems," Ramirez told reporters. He also said oil production in Venezuela remains a robust 3 million barrels a day, though analysts estimate it may be closer to 2 million barrels a day.

Regarding long-delayed talks with workers to establish a new three-year collective bargaining agreement on pay and benefits, he said the negotiations would take place after union elections take place.

He added that PdVSA intends to negotiate with union leaders who support Chavez.

"We are convinced that the majority of the working sector in the oil industry supports (Chavez' socialist) Revolution," he said. "So... we are going to discuss the collective agreement with those Revolutionary sectors of oil workers."  

Copyright (c) 2009 Dow Jones & Company, Inc.


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