In a surprise move, Venezuelan President Nicolas Maduro has named a new Economy and Finance Minister and also replaced Eulogio del Pino as head of the Oil Ministry in the latest attempt to get the long-suffering country back on its feet.
A parliamentarian, Ramon Lobo, will take on the responsibilities of both Finance Minister and Economy Vice-President, effectively turning into the top economy figure in the government.
The Oil Ministry will be headed by Nelson Martinez, former head of Venezuela’s U.S. business, Citgo. The former Oil Minister, Eulogio del Pino, will remain at the helm of state oil major PDVSA.
Venezuela has been hit the hardest by the oil price crash because of its almost complete dependence on oil revenues for everything from basic foodstuffs to social programs. Now, the country is in the grips of a severe recession, complete with food shortages and protests against the government, which is clinging to its power, with President Maduro claiming he is the victim of an economic war.
One of the most vocal supporters of a concerted action to improve international oil prices, Venezuela must have been the happiest OPEC member last year when the group finally agreed to coordinate a production cut across the board.
Related: This “Rogue” Oil & Gas Nation Just Set A Slew Of Output Records
Venezuela has to cut 95,000 bpd from its production, and earlier this week PDVSA announced it had begun the reduction that should see its daily average fall to 1.971 million barrels from 2.067 million barrels. It is one of the few OPEC members that are almost certainly unlikely to cheat on the production cut agreement – cheating has historically been rife in such agreements.
PDVSA barely escaped bankruptcy two months ago, and if OPEC’s cuts manage to lift oil prices, they would toss a lifeline to the struggling oil company and Venezuela’s oil revenues, which are almost all of its foreign currency revenues.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.