Venezuelan energy minister appointed as OPEC secretary-general

Jun 26, 2002 02:00 AM

The OPEC oil producers cartel chose Alvaro Silva, Venezuela's energy minister, as its secretary-general, said Abdullahal-Attiyah, the Qatari oil minister. The appointment is partly to try to prevent the Latin American oil-producing country from sapping cartel discipline and oil prices.
Oil prices fell slightly, with the benchmark Brent crude for August delivery down 19 cents at $ 25.01 a barrel. Venezuelan president, Hugo Chavez, who has been a loyal supporter of OPEC, dismissed as "rumour" reports that Venezuela was producing more than its current OPEC quota of 2.5 mm bpd. But Mr Chavez is under financial pressure to make up production lost during the strikes at the state oil company, Petroleos de Venezuela (PdVSA), which culminated in a failed coup against him in April.

Ali Rodriguez, the former Venezuelan energy minister, who has formally resigned as OPEC secretary-general to head PdVSA is reported to have already ordered a 200,000 bpd output increase at PdVSA. With world oil supply rising faster than overall oil demand, OPEC ministers left production quotas unchanged at their meeting in Vienna.
The cartel has kept a Venezuelan as the head of its Vienna secretariat by appointing Mr Silva to serve out the last 18 months of Mr Rodriguez’s term. Mr Silva, whose candidature was announced by Mr Chavez, was the only formal runner in the field. Mr Rodriguez used a recent farewell tour of several OPEC capitals in the Middle East to lobby for Mr Silva.
None of Venezuela's 10 OPEC partners named a candidate, perhaps fearing a repeat of 2000 when Saudi Arabia, Iran and Iraq blocked each another's candidates and eventually compromised on Mr Rodriguez. However, there have been some reservations over Mr Silva, who speaks little English and no Arabic.

Aged 73, Mr Silva is a dour and serious character compared with his predecessor. The choice of Mr Silva, according to one OPEC source, is less personal than "a strategic imperative to keep Venezuela on board to secure compliance with OPEC quotas". Oil industry executives in Venezuela remarked on his limited diplomatic charm and ideological rigidity.
As energy minister, Mr Silva last year drafted a new hydrocarbons law that raised royalty taxes. In the 1990s, he opposed the opening up of the oil sector to foreign capital. He was also involved in preparing the nationalisation law of 1976 that created PdVSA.

Source: The Financial Times
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