PDVSA Said to Be Preparing for Exit of President Del Pino

Updated on
  • Venezuela said to plan naming oil minister as head of PDVSA
  • PDVSA’s board of directors was overhauled earlier this year

Petroleos de Venezuela SA is preparing for the departure of its president Eulogio Del Pino in what would be the biggest management shift in years for the state-owned oil producer, people familiar with the plans said.

Del Pino, 61, may depart by July and will be replaced by Nelson Martinez, Venezuela’s oil minister, said the people, who requested anonymity because the information isn’t public. Martinez, 65, would remain in his role as oil minister in addition to becoming head of PDVSA. The move would come after a board shakeup in January and the recent replacement of some refining managers.

Del Pino has been in charge of PDVSA since 2014 and has worked at the company for about 30 years. He previously ran the energy producer while also serving as Venezuela’s oil minister, but in January the roles were split and Martinez, previously the head of U.S.-based unit Citgo Petroleum Corp., was named minister.

PDVSA and the oil ministry declined to comment. Del Pino’s office didn’t respond to messages seeking comment. The office of the Venezuelan president didn’t immediately reply to request for comment on the plans.

Venezuela, a founding member of the Organization of Petroleum Exporting Countries, has seen its crude oil output tumble to about 2 million barrels a day from more than 3 million barrels in 2001 as nationalizations, volatile crude prices and a heavy debt load sapped investment. PDVSA, which faces a $2.5 billion debt payment next month, has turned to importing lighter oils to blend with heavy crude from the Orinoco Belt and is shipping fewer refined products amid infrastructure difficulties.

President Maduro and Del Pino have said they plan to keep paying the government and PDVSA’s debt on time even as a cash crunch has meant having to pare back imports to meet the obligations.

The company’s bonds extended earlier losses after the news. Notes due next month traded at 95.6 cents on the dollar at 4:36 p.m. in New York, indicating investors are concerned about a timely payment in two weeks. Bonds due in November 2017 fell 0.61 cent to 87.41 cents per dollar even as oil rose.

Del Pino, who has an engineering degree from Stanford University, was vice president of production and exploration before taking over at PDVSA. He oversaw a distressed debt exchange last year to get some relief from the company’s debt load which has swelled in recent years to $40 billion.

To read more about Venezuela’s debt outlook, click here

In January, Venezuela President Nicolas Maduro added PDVSA board members and installed new executives in top positions, including a rear admiral. On March 24, PDVSA signed an agreement with the military’s oil service company CAMIMPEG to increase output in western Zulia state, a region that has seen severe declines in recent years.

— With assistance by Angelina Rascouet

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