Amid a worsening gasoline shortage and Chevron and Halliburton's imminent exit from Venezuela, the Nicolas Maduro government is looking to reverse the radical decline in its oil industry with two new appointments--one which involves putting a fugitive drug trafficker at the helm of its troubled oil industry.
Tareck El Aissami, previously Minister of Industries and National Production--and a current member of America's 10 Most Wanted--will replace Manuel Quevedo as Oil Minister. The second appointment places the cousin of late president Hugo Chavez at the helm of state oil company PDVSA.
El Aissami was recently added to the United States' list of 10 most wanted fugitives on charges of drug-trafficking after three years ago he was sanctioned for drug trafficking. He was later accused of violating the sanctions by receiving payments for facilitating the transportation of drugs, Reuters reports.
Venezuela has been fighting hyperinflation and persistent basic goods shortages as well as inexorably declining oil production brought about by a combination of underinvestment, mismanagement, and U.S. sanctions.
From more than 2 million bpd, its output has fallen to just 700,000 bpd.
It may fall further now that the United States is pressuring Chevron and Halliburton into leaving the country. The U.S. Office of Foreign Asset Control tightened Venezuelan oil sanctions earlier this month that pretty much prohibit both U.S. companies from doing business in the country. Chevron's joint venture with PDVSA produces about 200,000 bpd of heavy crude.
In February, Maduro declared an energy emergency that also aimed to overhaul the country's struggling oil industry. It seems it hasn't worked so far, with gasoline shortages worsening so much that the government began to shut down fuel stations across the country.
Venezuela produces little gasoline because its refinery network is in the same state of disrepair as its oil industry as a whole. It also imports little after imports from the United States stopped. Venezuela was the one that suspended imports from the U.S. amid the escalating row between the two.
Venezuelan oil, meanwhile, has fallen to below $10 per barrel. This is the lowest in more than twenty years.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.