Saturday, March 27, 2010

PDVSA and PEQUIVEN, is it better for Venezuela to merge them?

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Pequiven historically has been part of PDVSA business, it was about 8 years ago when Pequiven was decided to be completely independent from PDVSA. After this decision was made, the 3bn projects were announced and Venezuela as a petrochemical global player was announced.

Today, as it has been discussed here, some of the projects could be suspended, and there is some rumors about Pequiven going back as a filial of PDVSA.

If we take the examples of POC (Private Oil Companies), we can find both models, TOTAL's whose petrochemicals brand is somewhat independent and ExxonMobil whose petrochemical business is totally dependant to the rest of the group.

In the NOC (National Oil Companies) examples, Saudi Arabia has everything. SABIC (partially private company) is independent from Saudi Aramco and also Saudi Aramco itself is pursuing a very ambitious petrochemical project.

In short words, no structure has emerged as the optimal and crucial one. In the blogger opinion, the petrochemical business should be separated from the Refining and extraction business, however the plants should be completely integrated and sinergy should exist between them.

The nature of the petrochemical business is intrinsically different from oil and refining business. If the decision-making for both parties is under the command of the same office, it will harm the correct development of the business.

In this way of thinking, I am not excluding close cooperation between some office of PEQUIVEN and PDVSA, but complete subordination of the first should not happen.

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