Venezuela Appoints General to Tighten Grip on Oil Industry

CARACAS, Venezuela — A day after President Nicolás Maduro named a general to lead Venezuela’s beleaguered state-owned oil company, analysts and opposition leaders on Monday described the appointment as a political move that threatened to worsen the country’s misfortunes.

Mr. Maduro announced on Sunday that Maj. Gen. Manuel Quevedo would assume control of Petroleos de Venezuela, or Pdvsa, as well as of the oil ministry. As the government wrestles with declining production and crushing debt amid an unrelenting economic crisis, the president cast the appointment as an attack on rampant corruption that has bled Pdvsa of profits and undermined its operations.

His opponents, however, described it as Mr. Maduro’s latest effort to purge the company’s leadership and consolidate control over the nation’s vital oil industry. The Maduro administration has arrested about 50 people associated with Pdvsa in the past several months as it has pressed an anti-corruption campaign within the public oil sector.

“The time for a new oil revolution has come,” the president declared during a nationally televised broadcast.

Opponents and some analysts said the appointment of General Quevedo, who was formerly the housing minister and has no known experience in the oil industry, appeared to be part of a strategy by the widely unpopular president to forestall dissatisfaction within his security forces. Left unchecked, that could threaten his grip on power.

General Quevedo joins several current and retired military officials whom Mr. Maduro has named to leadership posts in his government, including a general who was put in charge of the Transportation Ministry on Sunday. General Quevedo replaces two civilians at the oil ministry.

“Maduro identifies the military as his security blanket, and his almost five years in office have been marked by the military progressively getting more and more goodies,” said David Smilde, a senior fellow at the Washington Office on Latin America. “He’s basically buying off the military.”

Putting General Quevedo in charge of Pdvsa, Mr. Smilde said, is “the maximum expression” of this strategy, “the jewel in the crown.”

Reuters reported on Monday that General Quevedo, who will be sworn in on Tuesday, planned to name more military officers to his senior management team.

José Guerra, a member of the opposition controlled National Assembly, said on Twitter that the appointment showed that the country “is in bad hands, that there is no planning for important positions.”

The state-owned company has lost some of its most experienced managers through firings, imprisonments and emigration in recent years, and some analysts said that the ceding of control to military officers might accelerate the flight of talent.

The reshuffling at the top of Venezuela’s energy sector came a week after Mr. Maduro’s attorney general announced the arrest on corruption charges of the acting president and five senior executives at Citgo, the United States refining subsidiary of Pdvsa.

The company has directed its employees to cut costs in half as it faces possible default on billions of dollars in bond debt.

Shannon K. O’Neil, a Latin America analyst at the Council on Foreign Relations, said, “Quevedo’s appointment can’t be good for stopping the current production declines.”

“What it does is ensure military loyalists are now in charge not just of food distribution but also now of oil — the two main levers of power in Venezuela’s shrinking economy,” she said. “Despite Maduro’s rhetoric, this choice was all about political power and control, not the revitalization of production.”

The Maduro administration, seeking to ease Venezuela’s dizzying economic crisis, is trying to restructure Venezuela’s $63 billion in bonds, most of them issued by the government and Pdvsa. Debt payments have helped drain the government’s coffers of foreign currency that might otherwise be used to import food, medicine and other critical imports.

Once one of the leading oil producers in the world, Venezuela, despite having the largest oil reserves in the world, has seen its production levels plummet to 1.9 million barrels a day, down from 2.4 million barrels a year ago.

Yet Pdvsa still accounts for nearly all of the country’s export earnings and roughly half of government revenues.