April 14, 2018 / 1:51 PM / 5 days ago

Venezuela empowers oil minister Quevedo to reform energy sector

CARACAS (Reuters) - President Nicolas Maduro has decreed extra powers to his oil czar Manuel Quevedo to try and halt sliding crude output in crisis-hit Venezuela, which has sunk to its lowest level since the 1950s.

FILE PHOTO: Venezuela's President Nicolas Maduro gestures during a TV show with National Constituent Assembly member Diosdado Cabello in Caracas, Venezuela April 11, 2018. Miraflores Palace/Handout via REUTERS

Struggling with a deep economic recession, failed socialist policies, debt default, and U.S. financial sanctions, Venezuela’s crude production slipped to 1.586 million barrels per day in February, according to OPEC.

Maduro’s decree, seen by Reuters, gives Quevedo, a major general, powers to “create, annul or modify” deals involving state energy company PDVSA and its subsidiaries. The oil minister is also head of PDVSA.

It was not immediately clear what that might mean for PDVSA’s joint ventures. But Quevedo met late on Friday with some foreign partners including representatives of Total (TOTF.PA), Statoil (STL.OL), Chevron (CVX.N), Rosneft (ROSN.MM) and China National Petroleum Corp (CNPC).

FILE PHOTO: Venezuela's Oil Minister and President of the Venezuelan state oil company PDVSA Manuel Quevedo attends the event launching the new Venezuelan cryptocurrency "Petro" in Caracas, Venezuela February 20, 2018. REUTERS/Marco Bello

In a statement, PDVSA said the new measure would enable a reorganization of operations and minimization of bureaucracy.

“We are going to work with PDVSA to implement the measures and increase production,” Rosneft representative Pavel Kamenets was quoted as saying in the PDVSA statement.

    The decree creates a “special regime” in the sector until Dec. 31, with the possibility of a year’s extension. “The Oil Minister will be able to ... establish norms and special contract procedures for products, assets and services,” it said.

    One clause ordered all specialized personnel, on national or international assignments, to return to original workplaces.

    Socialist leader Maduro has promised a vast anti-corruption purge to cleanse the oil industry of “mafias”.

    At least 70 executives have been detained in recent months, panicking PDVSA workers, depriving the industry of much of its top brass and stalling decision-making in the company overseeing the world’s biggest crude reserves, insiders have said.

    The opposition dismisses the probe as a power struggle within government, noting that the industry has been under tight control of the Socialist Party since early in former president Hugo Chavez’s 14-year rule.

    Reporting by Deisy Buitrago; Writing by Andrew Cawthorne; Editing by David Gregorio

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