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Insight: Under military rule, Venezuela oil workers quit in a stampede

Reuters  |  CARACAS 

By Deisy and Alexandra Ulmer

CARACAS (Reuters) - Chauffeured around in a sleek black pick-up, the of Venezuela's industry, General Manuel Quevedo, last month toured a joint venture with U.S.

Flanked by other trucks carrying security guards, Quevedo passed a handful of workers waiting by an well cluster. They wanted a word with the OPEC nation's and president of its state-run oil firm, PDVSA, about the sorry state of the company.

Quevedo and his caravan drove on by.

"He didn't get out to ask workers about what is going on," said Jesus Tabata, a who works on a rig in the oil-rich Belt. "That way it's easier to keep saying everything is fine - and at the same time keeping us on like slaves on miserable wages."

What's going on is that thousands of are fleeing the state-run oil firm under the watch of its new military commander, who has quickly alienated the firm's embattled upper echelon and its rank-and-file, according to union leaders, a half-dozen current workers, a dozen former workers and a half-dozen executives at foreign companies operating in

Some offices now have lines outside with dozens of workers waiting to quit. In at least one administrative office in Zulia state, human resources staff quit processing out the quitters, hanging a sign, "we do not accept resignations," an there told

Official workforce statistics have become a closely guarded secret, but a dozen sources told that many thousands of workers had quit so far this year - an acceleration of an already troubling outflow last year.

About 25,000 workers resigned between the start of January 2017 and the end of January 2018, said and government critic Ivan Freites, citing internal company data. That figure comes out of a workforce last officially reported by PDVSA at 146,000 in 2016.

Resignations appear to have increased sharply this year, said Freites, a prominent at Venezuela's refineries in the northern

"It's unstoppable," he said.

Many of those leaving now are engineers, managers, or lawyers - high-level professionals that are almost impossible to replace amid Venezuela's economic meltdown, the PDVSA workers and foreign executives told

PDVSA and the did not respond to repeated requests for comment. PDVSA and pro-government union acknowledged the flight of talent is a serious problem.

"The massive resignations are worrying," Rangel said in an interview. "In refinery operations, many have left."

The pace of departures has quickened with the rapid deterioration of PDVSA's operations and finances - radiating pain through the OPEC nation's oil-based economy, now beset with and hyperinflation.

Quevedo - a little known former housing who replaced two executives jailed for alleged graft - has further poisoned the atmosphere, according to the two dozen sources who spoke with Reuters.

A who rose through the National Guard, Quevedo fired many long-term employees upon arrival and urged remaining ones to denounce any of their colleagues who oppose Maduro. He tapped soldiers for top roles, giving the oil firm the atmosphere of a "barrack," two company sources said.

"The military guys arrive calling the engineers thieves and saboteurs," said a Venezuelan at a private company who frequently works with PDVSA.

Quevedo is also fighting to retain control of a company increasingly riven by turf wars. The ruling socialists, once held together by late leader Hugo Chavez, have succumbed to infighting under Maduro, a former who lacks Chavez' charisma and has seen his budget slashed with the decline in global

Quevedo has clashed with Venezuela's When El-Aissami in February appointed a to the PDVSA unit that oversees joint ventures with foreign companies, Quevedo removed the appointee and had him arrested, according to three sources with knowledge of the incident, which has not been previously reported.

Quevedo is an ally of heavyweight Diosdado Cabello.

"There is a fight between Diosdado and Tareck for control of the industry," said Hebert Garcia, a former who later broke with Maduro and fled the country.

The political turmoil and mass resignations threaten Maduro's government, which depends on oil for 90 percent of export revenue.

In the Belt, some drilling rigs are working only intermittently for lack of crews, said two sources there. In PDVSA's refineries, several small fires have broken out because there are no longer enough supervisors, two sources in the northern said. Lack of personnel in export terminals have forced some ports to cut back working hours, according to two shippers and one

in the first quarter of this year slipped to a 33-year low of 1.6 million barrels per day.


Jobs at PDVSA were once coveted for their generous salaries and benefits, including cheap credit for housing. Now, many PDVSA workers can't feed their families on wages that amount to a handful of U.S. dollars a month.

that caused Venezuelans to report losing an average of 11 kilograms (24 pounds) last year are particularly tough for tasked with grueling physical work in often

Some have resorted to working odd jobs on the side, taking vacation to work abroad, or even selling their work uniforms - red overalls - for money to eat.

Some workers in Lake Maracaibo, a production region near Colombia, can no longer get to their jobs, according to two sources there. Transport can cost up to 55,000 bolivars - equal to only 10 U.S. cents, but close to what some workers earn in a day.

"Now what we ask each other is: 'When are you leaving and for where?'," said one of the workers, who like thousands of other Venezuelans emigrated to this month. "Even in the bathroom, people are talking about quitting."


At PDVSA headquarters, Quevedo often walks through the offices with a half dozen bodyguards who clear his path, according to one current and one former PDVSA employee.

The company's ongoing decay is evident all around him in the once polished office tower: Broken elevators, poor cafeteria food, in once-crowded divisions.

Maduro has overseen the arrest of dozens of high-level PDVSA executives since late last year, sometimes at the as shocked employees looked on. Workers now feel watched by supervisors and are loathe to make any business decision out of fear they will later be accused of corruption, the sources said.

PDVSA workers, often visibly thinner, sometimes surreptitiously hand out resumes to executives from private companies, according to a source at a foreign firm.

In a rare protest last month, angry workers blocked access to the cafeteria, demanding better benefits and chanting that Quevedo should resign.

Venezuela's foreign oil partners, which include California-based Chevron, Russia's and China's CNPC, are increasingly worried about PDVSA's rapidly departing workforce, according to a half-dozen sources at multinational companies operating in But as minority partners, they have little or no sway over salaries and management.

The foreign partners have also grown increasingly frustrated with Quevedo, who initially asked for their suggestions on fixing the state-run firm but now appears ill-disposed towards reforms, the sources said.

At least one foreign company is considering bringing in foreign specialists to improve its operations, one of the sources added. But with crime, power cuts and shortages rampant in Venezuela, luring foreign professionals is tough.

Still, in the belt, some vow to stay in the belief that can't last.

"We can't give up," said Tabata, the union leader who watched Quevedo's truck drive by that day. "This government is unstable and could fall at any moment - and who will be left?"

(Reporting by Deisy and Alexandra Ulmer; Additional reporting by in Punto Fijo, Marianna Parraga in Houston, and Brian Ellsworth in Caracas; Writing by Alexandra Ulmer; Editing by Brian Thevenot)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 10:40 IST