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Statoil firings for politics

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  1.  
  2. SIPDIS
  3.  
  4. ENERGY FOR CDAY AND ALOCKWOOD
  5. NSC FOR JCARDENAS AND JSHRIER
  6.  
  7. E.O. 12958: DECL: 01/12/2017
  8. TAGS: EPET, ENRG, EINV, ECON, VE
  9. SUBJECT: SINCOR\'S ROCKY TRANSITION TO PETROCEDENO
  10.  
  11. REF: A. CARACAS 1481
  12.      B. CARACAS 1314
  13.  
  14. Classified By:  Economic Counselor Andrew N. Bowen for Reason 1.4 (D)
  15.  
  16. 1. (C) SUMMARY: Strategic association Sincor\'s transition to
  17. Petrocedeno, a PDVSA-controlled joint venture, has been
  18. fraught with labor problems.  Labor union members have
  19. blocked the road to the upgrader 33 days so far this year.
  20. Approximately 100 employees have quit their jobs.  A work
  21. plan is in place with several major projects.  PDVSA has
  22. tried to cover up accidents and may be hiding information
  23. from its partners.  END SUMMARY
  24.  
  25. ---------------------------
  26. A SOMEWHAT ROCKY TRANSITION
  27. ---------------------------
  28. 2.  (C) Petroleum Attache met with Sincor Deputy General
  29. Manager Jane Nagy (strictly protect throughout) on August 20
  30. to discuss Sincor\'s migration from strategic association to a
  31. PDVSA-controlled joint venture, Petrocedeno.  Sincor is one
  32. of four strategic associations in the Faja.  Nagy is an
  33. employee of Statoil, the Norwegian state oil company, which
  34. seconded her to Sincor.  Statoil will have a 9.677% stake in
  35. the Petrocedeno joint venture.  PDVSA will control 60% of the
  36. joint venture and the French oil company Total will hold the
  37. remaining shares.  Nagy sits on the transition committee
  38. tasked with handling all of the major issues arising from the
  39. migration.  She began by noting that Sincor has had several
  40. labor-related problems.  She stated labor union members,
  41. upset over the fact that they do not have a collective
  42. contract, have blocked the road to the Sincor upgrader 33
  43. days so far this year.  The blockages have kept employees
  44. from arriving at work and had a disruptive effect on
  45. operations.
  46.  
  47. 3.  (C) In addition to the protests, approximately 100
  48. employees have resigned their positions following the
  49. announcement that Sincor would migrate to a PDVSA-controlled
  50. joint venture.  Nagy stated 80% of the departing employees
  51. had six to twenty years experience.  Among the departing
  52. employees were senior engineers and technicians.  Nagy stated
  53. the Faja is full of headhunters who are hoping to pick up
  54. experiences employees.  She stated almost all of the
  55. departing employees are looking for overseas positions.  When
  56. asked if Sincor employees had received their new Petrocedeno
  57. compensation package, Nagy replied that they were still
  58. waiting to receive it.  (COMMENT:  As reported in Reftel A,
  59. compensation packages at other strategic associations have
  60. contained pay cuts of over 30 percent.  We expect the
  61. packages that Sincor employees receive to contain similar
  62. cuts.  END COMMENT)
  63.  
  64. 4.  (C) Nagy also stated the recent firing of four new
  65. employees was the most difficult situation she has had to
  66. face in her career.  The employees, recent graduates who were
  67. recruited for a prestigious training program, were fired due
  68. to their political leanings.  The opposition newspaper Tal
  69. Cual interviewed some of the fired employees and printed a
  70. large story with plenty of details.  Nagy said Sincor
  71. employees placed considerable pressure on her to do something
  72. about the situation but there was little that she could do.
  73. She stated PDVSA\'s actions in the case and labor policies in
  74. general were the subject of an acrimonious transition
  75. committee meeting.  She stated she never received minutes
  76. from the meeting and it is not clear if PDVSA will ever pass
  77. them to Total and Statoil, its two private sector partners.
  78.  
  79. ------------------
  80. ON THE BRIGHT SIDE
  81.  
  82. CARACAS 00001655  002 OF 002
  83.  
  84.  
  85. ------------------
  86. 5.  (C) On the positive side, Nagy stated Sincor\'s work plan
  87. is in place and includes major improvements in upstream
  88. facilities.  In addition, the Sincor upgrader is scheduled
  89. for major maintenance shutdown in February 2008.  Sincor will
  90. also go ahead with an enhanced recovery pilot project.  Nagy
  91. stated it is not clear at this point if Sincor will carry out
  92. a major debottlenecking project in the near future.
  93.  
  94. 6.  (C) Nagy also confirmed that Sincor\'s block size will
  95. remain the same after the migration to the joint venture.
  96. Senior BRV officials repeatedly stated during the migration
  97. negotiations that they would reduce the size of the strategic
  98. associations\' blocks.  Nagy added that Statoil retained
  99. control of marketing in the new joint venture.  (COMMENT:
  100. Chevron also stated that the block size in the Hamaca
  101. strategic association was not reduced as a result of the
  102. migration and that Chevron retained control of marketing
  103. (Reftel B).  END COMMENT).
  104.  
  105. --------------------------
  106. PDVSA PLAYS FAST AND LOOSE
  107. --------------------------
  108. 7.  (C) Nagy complained that PDVSA tries to hide accidents
  109. and other negative information from the outside world.  She
  110. stated Sincor recently had an accident at one of its wells.
  111. She stated the accident was not a blowout but rather an
  112. overflow.  Although the accident was not major in nature,
  113. Nagy stated she promptly reported it to Statoil\'s
  114. headquarters.  However, she stated PDVSA did not want to
  115. acknowledge the accident on the grounds that it was not that
  116. serious.  She attributed PDVSA\'s attitude to a desire to keep
  117. down accident statistics.  Nagy added she was concerned that
  118. PDVSA was hiding information from its private sector partners.
  119.  
  120. -----------------------------------
  121. PORT FACILITIES ARE A MAJOR CONCERN
  122. -----------------------------------
  123. 8.  (C) Nagy ended the meeting by opining that the USG should
  124. keep its eye on Venezuela\'s port facilities.  She claimed the
  125. BRV has not spent any money on port facilities or carried out
  126. basic maintenance in years.  She stated one of Sincor\'s
  127. berths is inoperable.  As a result, Sincor may have to reduce
  128. production in the next several weeks due to problems shipping
  129. its production.
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