With just five days before Venezuelan Oil Minister Ali Rodriguez becomes OPEC’s new secretary general, Venezuelan President Hugo Chavez named Deputy Oil Minister Alvaro Silva Calderon to head the Latin American producer’s oil ministry on December 27th.
Silva is to be sworn in on December 28th. Rodriguez had been chosen at OPEC’s ministerial conference in November to succeed Rilwanu Lukman as the group’s top secretariat official effective January 1st, 2001.
There had been much speculation about Rodriguez’s replacement, with Chavez raising the possibility on December 10th that he could again pluck a general from the military as the new oil minister, following his appointments of General Guaicaipura Lameda as head of state-owned oil firm Petroleos de Venezuela S.A. (PDVSA) and General Oswalsdo Contreras as chief of PDVSA refining subsidiary Citgo Petroleum Corp. in October.
Although Silva and Deputy Oil Minister Bernado Alvarez had both been considered top contenders to replace Rodriguez at the top of the ministry, neither had close political ties to Chavez, which has been an influencing factor in the president’s appointments.
However, Silva has had strong experience in Venezuela’s oil sector, and has been seen as loyal to both Chavez and changes in Venezuela’s political process. The 71-year-old Silva was vice minister of mines before being appointed oil minister.
A lawyer and former Venezuelan congressman for a fringe social democrat party, Silva wrote the law that nationalized the country’s oil industry in 1975, as well as the reversion law, under which foreign oil firms were required to relinquish their oil assets to the government.
Deputy oil minister for mines for the last two years as well as external director of PDVSA since June, Silva has reportedly been crafting the country’s new hydrocarbons law, under which the royalty tax rate on every barrel produced in Venezuela will increase from one-sixth to one-fifth of gross revenue.
This is extremely unpopular among foreign oil firms operating in Venezuela, and Silva will be expected to help push through the draft law in 2001 and engage in negotiations with foreign investors to encourage them to switch over to the new tax regime.
