Oil and bullets

Two interesting stories, from the indispensable foreign press.

First, Bloomberg’s Anatoly Kurmanaev explores the lack of progress in reining in guns and munition, and how it shows the powerful sway of the military. He reminds us that, in theory, the military should have begun coding individual bullets as a way of tightening control over munition. It has not done so:

Not only does the military not code its bullets, it has also resisted greater transparency. The Disarmament Law stated that Cavim had to present an annual report on bullet production and sales to congress, starting in 2014. The company has yet to do so, according to opposition lawmakers Ricardo Sanchez and Eduardo Gomez.

“Parts of the military are clearly not interested in having greater oversight of their business activities,” Sanchez said.

Their refusal to present reports is stoking speculation that the military’s top brass is making money by selling ammunition on the black market, said Venezuelan Violence Observatory director, Roberto Briceno Leon.

It is also a further illustration of their stranglehold over the government as the economy contracts and prices spiral higher, Guzman Perez said.

Then, Reuters’ Marianna Párraga and Alexandra Ulmer talk about a strange new trend: PDVSA is being slowly de-politicized. Here is what they say:

Over the past few months, however, the company’s new management – led by president Eulogio del Pino, a low-profile Stanford-educated engineer – has eased up on revolutionary garb and attendance at militant gatherings, according to sources within and outside the company.

New posters inside its Caracas headquarters request employees don normal office wear, visitors say, a telltale sign of what could be the most sweeping changes in over a decade at a firm that controls the world’s largest crude reserves and generated some $78 billion in exports in 2013 – 96 percent of Venezuela’s hard currency revenue.

The sartorial shift symbolizes the new management’s effort to regain focus at a firm that has become a haven for political friends and operatives, according to people familiar with the strategy.

It marks a sharp pivot after a decade under the helm of Ramirez as shoring up the nation’s main cash cow trumps ideology in the face of the collapse in global crude prices.

The changes go well beyond the symbolic: PDVSA is granting its minority partners more financial and operational sway in joint ventures, according to sources close to the company. A dozen of those foreign oil companies are also poised to tap the most favorable exchange rate of Venezuela’s complex three-tiered currency system.

Some of the firm’s roughly 150,000 employees have been laid off, particularly those with overt political roles, and hundreds of oil ministry staffers have also been let go, according to a union leader and a source close to the government.

“They’re trying to find mechanisms to give people confidence in investing, and also trying to increase production,” said one foreigner close to joint ventures.