CARACAS (Reuters) - Shock and fear swept through the headquarters of Venezuela’s state-owned oil firm, PDVSA, on Monday, employees said, after the United States imposed sanctions aimed at limiting President Nicolas Maduro’s access to oil revenues.
A high-level manager said PDVSA President and Oil Minister Manuel Quevedo was ensconced in his office. Several employees and union leaders wondered how much worse PDVSA’s situation could get now that President Donald Trump’s administration had frozen its crucial U.S.-based assets.
“There is total shock. This company is already too beat-down,” the manager said on condition of anonymity. PDVSA was once among the world’s leading oil companies, but has suffered years of mismanagement and output declines.
White House national security adviser John Bolton said the sanctions on PDVSA were intended to prevent Maduro’s government from siphoning off funds from the oil company to maintain his grip on power. Bolton said they would block Maduro from accessing PDVSA assets worth $7 billion and cost him $11 billion in lost export proceeds over the next year.
Trump’s order restricts assets including PDVSA’s U.S. refining arm, Citgo Petroleum Corp,, Venezuela’s most important foreign asset and a key source of foreign income.
The U.S. government, along with countries around the world, have declared Maduro an illegitimate usurper and have thrown support behind the leader of the Venezuelan opposition, Juan Guaido, who has proclaimed himself interim president.
Maduro began a second term on Jan. 10 after an election last year that the opposition and the United States considered a fraud. Maduro says he is victim of an economic war and accuses Trump of directing a coup against his socialist government.
On Monday, Maduro said the United States was unlawfully seeking to “steal” Citgo and PDVSA would take legal action to defend Venezuela’s U.S. interests.
Since being appointed oil minister in 2017, Quevedo, a National Guard general, has enacted a series of measures that oil industry experts and PDVSA employees say have pushed the company, which accounts for over 90 percent of export revenues, toward ruin.
Quevedo gave the company’s reins to military managers with scant oil experience, while workers face the risk of arrest and charges of sabotage or corruption, and contracts go to small, little-known firms with no experience in the sector, according to a Reuters special report last month that cited former and current officials.
Ivan Freites, a PDVSA union leader, said the sanctions marked the moment for “responsible people” to take over Venezuela’s oil industry, where production has slid to a 70-year-low after years of crushing debt and shrunken investment.
“It’s an industry ruled by mafias, where smuggling is the chief operation,” Freites said.
Thousands of PDVSA’s workforce, which totals some 100,000 employees, have already fled abroad to escape poor pay and shortages of food and medicine, draining the company of expertise, according to employees.
Employees said there were no tears at PDVSA’s headquarters, just stony-faced resignation. They said they were tired of Quevedo’s military management and the corruption they alleged had spread to every corner of the company.
“There is no return now. Either Maduro leaves, or the country sinks completely,” said one plant operator.
The Trump administration had long held off on targeting Venezuela’s vital oil sector for fear it would hurt U.S. refiners and deepen Venezuela’s economic crisis. The United States stopped short of imposing a ban on imports of Venezuelan oil, which U.S. oil refiners had opposed.
Reporting Deisy Buitrago and Mircely Guanipa; Additional reporting by Isaac Urrutia; Writing by Angus Berwick; Editing by Peter Cooney