On June 30, an explosion at the José Antonio Anzoátegui Cryogenic Complex in Barcelona, eastern Venezuela, raised 50-meter flames into the air; according to authorities, the fire was put out within 20 minutes without any injuries being reported. Then, on August 11, a lightning bolt hit the waste lagoon of Puerto La Cruz refinery, also in the east of the country. “The fire is confined to the lagoon,” informed Asdrúbal Chávez, vice-president of refinery, trade and supplies of the state oil company Petróleos de Venezuela (Pdvsa) – and a cousin to the country’s late leader Hugo Chávez.
On August 20, another lightning bolt set fire to a smokestack at the Amuay refinery, one of two plants that make up the Refining Complex of Paraguaná, the largest in the country. It was exactly a year ago that a gas leak caused an explosion here, killing at least 42 people. The government regularly complains that “the right” uses these accidents for “media terrorism” purposes.
Over the last year, Pdvsa has reported 24 incidents at its refineries, ranging from fires, power cuts and unscheduled stoppages, to gas and fuel leaks. Most of these problems have occurred at the plants of Amuay and Cardón, which make up the Paraguaná complex: there were four incidents in May, one in June, another one in July and four more so far in August. Residents of nearby buildings who lost their homes or had their windows shattered by the blast of August 25, 2012, remember the horror they felt at the sight of tongues of fire and plumes of smoke coming out of the facilities.
“Workers cross themselves when they walk in; many of them would rather not be there,” an employee named Juan Montero told the Caracas daily El Nacional, as part of a report exposing the drain of qualified personnel to Colombia because of the poor pay and unsafe conditions at Venezuelan refineries. This migratory drip adds to the mass exodus that began in 2003, when President Chávez ordered 20,000 industry professionals fired. These laid-off operatives ended up working for oil companies in Mexico, Canada, United States, Brazil, Qatar, Saudi Arabia, Aruba and Curaçao.
Workers cross themselves when they walk in; many of them would rather not be there”
Venezuela’s state oil company operates 24 refineries: six of them are located in Venezuela and the 18 others are in Aruba, Curaçao, Cuba, Dominican Republic, Jamaica, the United States, Sweden and Britain.
In 2012, Pdvsa’s refinery, trade and supply activities showed losses of nearly 7.8 billion dollars. Since May 2007, this department has been run by Asdrúbal Chávez, a chemical engineer with 28 years’ experience at the state company. According to the oil unions, the constant accidents and losses in the refinery area are a result of lack of investment in industry operations, especially in 2011, when “contributions to social development” were nearly 50 percent higher than the amount spent on investment. But according to the government, the red numbers of the last 18 months are due to the blast at Amuay, to the lightning bolts, to the electric storms and other natural causes.
The fuel that Venezuela no longer produces is being bought from the United States. In April 2013, Venezuelan purchases of diesel, gasoline, liquefied gas, fuel oil and other refined products on the US market grew 138.8 percent compared with the same month last year, according to Energy Department figures. In the first four months of the year, it was an average of 129,000 barrels a day. According to the same report, dated June 2013, Pdvsa’s exports to the US were 847,000 barrels a day: four percent represented fuel and the remaining 96 percent was crude. This constitutes 52 percent of Venezuela’s total production, and it is the only product that is paid for in cash at daily prices. The rest is sold on the domestic market, to friendly countries on credit, or used to pay loans from China.
Pdvsa’s debt stood at over 40 billion dollars last year, a 14.7-percent rise from 2011, even though prices of the Venezuelan oil basket remained in the 100-dollars-a-barrel area. In 1998, before Chávez won his first elections, at a time when the Venezuelan barrel of oil was going for nine dollars, debt was around three billion dollars. The oil industry has been the economic staple of social spending and political power in Venezuela, especially during the last decade. Most of the money that Pdvsa produces or requests as loans has gone towards non-oil related activities, such as subsidizing the exchange market, which has been under strict government control since 2003; purchasing food that gets sold at lower prices in popular markets; or sustaining the “social missions” that work as parallel ministries relating to health, education and military issues. That is why, despite the high prices that oil is commanding, Petróleos de Venezuela remains in a risky financial situation.
The machinery that oiled Venezuelan diplomacy and kept the popular classes satisfied under Chávez, is showing signs of collapsing, and this should be a major concern for the charismatic leader’s successor in power, Nicolás Maduro. According to data supplied by the Venezuelan government to the OPEC, Pdvsa’s total crude production between January and May 2013 was 2.7 million barrels a day, 2.92 percent less than in August 2012. These figures are well below the target that Hugo Chávez had set. “By 2014 we should be close to four million barrels a day. By 2019 we should be at six million barrels a day. We are one of the few countries in the world with this great capacity for growth in production,” he said in September 2011, the year that Pdvsa spent the most money to keep the people happy.