Venezuelan National Oil Company to Create Diversified Branch Companies

Caracas, August 29, 2007 (venezuelanalysis.com) —The Venezuelan government's Central Planning Committee is proposing the creation of seven new companies as branches of the state oil company to promote growth and development in diverse sectors of the economy.

Venezuelan Energy Minister Rafael Ramírez presented the plan to President Chavez on Monday in a meeting with the other major government ministers that make up the committee.

With enormous proven oil reserves, Venezuela is using its oil sector as the catalyst for a wide variety of development programs. This project will create seven companies as branches to PDVSA, which are PDVSA Industry, PDVSA Naval, PDVSA Agriculture, PDVSA Services, PDVSA Popular Gas, PDVSA Urban Development, and PDVSA Engineering and Construction.

The Central Planning Committee, headed up by Vice-President Jorge Rodriguez, was created as a permanent structure of the government last June with the intention of coordinating national economic planning and government management in order to achieve economic development and sovereignty.

The objective of the committee is to carry out the economic policies of the government, coordinating the efforts of different ministries, and taking measures to follow up and evaluate the impact of the polices on the needs of the population, according to government sources.

With the creation of new branches of PDVSA, the state oil company would extend its influence beyond the oil industry and into other important sectors of the economy by contributing to agricultural production or the construction of housing, among other activities.

The recuperation of the state oil company by the Chavez government as well as preventing its privatization has allowed PDVSA to play a fundamental role in the government's plans for economic development. President Chavez's recent proposal for constitutional reform seeks to strengthen the state's role in the exploitation of the nation's resources.

At the meeting, President Chavez reflected on the national economy and emphasized the importance of building a new economic model based on socialist principles.

Venezuelan Minister of Agriculture Elías Jaua also presented to the Central Planning Committee the plan to increase national agricultural production. The plan, known as the Battle for Food Sovereignty, is the continuation of the Agricultural Ministry's efforts to build a new agricultural model in the country by the year 2015.

According to government sources, the objective of the plan is "to promote a new model of agricultural production based on the principles of agrarian socialism, to guarantee agricultural sovereignty and the conditions of decent living for the Venezuelan population."

The program is a continuation of the government's National Agricultural Project and seeks to battle against the food shortages that the Venezuelan government has been dealing with since early this year, as well as increasing national production. The Minister of Agriculture predicted a 16 percent increase in agricultural production for 2007.