A Life in Venezuelan Oil and Politics

Eduardo Blanco, a self proclaimed ruler of the Blanco family, is my Grandfather who was born, raised, and currently lives in Caracas, Venezuela. Once, the country of Venezuela was the most affluent in South America in part to its booming oil industry. Now, Venezuela is a state of social, economic, and political crisis. With Caracas named the most dangerous city in the world, inflation skyrocketing, and a government rampant with corruption, Venezuela is in chaos. Eduardo Blanco graciously recounted his experiences growing up in Venezuela, working within a leading oil and natural gas company, as well as his insight of the Hugo Chavez administration and the long term effects of the “Chavismo” ideology has had on Venezuela and it’s people. The following is a transcript of his recount of his life and career in Caracas, Venezuela.

Where were you born?

I was born in Caracas, on May 3, 1946. Caracas is the capital of Venezuela and it is set in a valley. We have a beautiful almost mountain called “el avila.”


What was your childhood experience like growing up in Venezuela?

Life during my childhood was simple but wholesome I remember playing cowboys and indians, baseball in the middle of the street, going to the movies by myself when I was twelve or thirteen, and sometimes taking my brothers with me. My schools were catholic. During what we called primary, 1st through 6th grade, whenever you did something wrong, some kind of punishment would be given. One the favorite ones was to hit you with something like 2×4 in the palm of your hands. Also, pull your hair and stuff like that. Very important, whenever you told your parents, it was general, your parents will support the teacher. In high school I went to a jesuit one. They never hit anybody they simply invited you to spend some time in the school after classes or if it was a more serious one, to come saturday afternoon and the whole day on sundays.


I rode my bike all over the place, roller skated (that was something that my friends and I did in december). It was not unusual for us to skate all night long. We went a long way.


Can you describe your experience as a student at University in Venezuela?

There are two types of colleges in the country public which are free and private. When I started I wasted my time for the first year and a half. Basically I cut classes frequently, did not pay any attention to the courses and it was the first time I had women as schoolmates. It was a fantastic discovery for me.


With my mother’s death, I had to start working to marginally help my brothers. At that time I learned the harsh reality that college was quite necessary. I started going to night school, but the options were more limited than the day schools. In Venezuela, when you start college you have to choose a profession like lawyer, engineer, economist and so on. I selected to be an economist. The company I worked for at that time gave me half of a scholarship. From the second year onward, the college gave me a full scholarship.


By the way, I met your grandmother the second day of my classes and by the end of the year we were in love. We were married in our second year at college and Maite was born in our third year.


I graduated cum laude. At the beginning of my college I found out that the Ministry of Hydrocarbons, the equivalent to a Secretary of State in the United States government, had a program where they gave a full scholarship for graduate studies abroad to their best students.


I was selected for the scholarship. That year the congress approved an extraordinary scholarship budget and the ministry did not have qualified students to send abroad, either they did not have good grades or were not in careers related to oil. The person in charge of selecting students asked me if I knew somebody with good grades and willing to study in fields related to oil. I told them that my wife was an excellent student. They interviewed her and she got the scholarship.


The ministry had a deal with Pennsylvania State University to accept us in their program of Mineral Economics, at that time a very good and recognized program.


I did not speak English. My sponsor gave me ten weeks of English courses before taking a full load of courses in the master program. I drove people crazy trying to speak English. The worst was answering the phone.


We completed our master degree in about a year and half and later we started our PhD program. We came back to Venezuela to work for the ministry in some project for OPEC [Organization of the Petroleum Exporting Countries]. It took almost a year and then they told us that we have to reapply for the scholarship and that in another year we would be able to continue our studies.


The Venezuelan Government had implemented a massive plan of sending about 10,000 students to study abroad. The plan was called Mariscal de Ayacucho. A friend of ours had a high position in the planning ministry and gave us the opportunity to apply for a scholarship. We were the first Phd students to be included in the program. We achieved the degree. Those times were very happy.


Can you tell me about your positions in the Venezuelan oil industry?

AN INTERJECTION- Venezuela has a huge oil deposit, La Faja, of very heavy oil. To make that oil commercial, large refining capabilities has to be developed, mainly cokers. In order to develop La Faja, large investments were necessary and PDVSA (Petróleos de Venezuela, S.A) could not carry them, so it was decided that joint ventures were required with companies that had the financial and technological muscle to take on those projects. Those companies in turn, asked for some tax benefits , control and extraterritoriality to resolve conflicts (like arbitration). It is worthwhile to remember that at that time the oil market was in bad shape for the country.


I started in Maraven SA, an operating affiliate of PDVSA which was a holding company. The way the oil industry was organized after nationalization was as follows: There were very large companies in Venezuela Creole (Exxon), Shell, Mobil and a bunch of others, mainly American.


I started in commercial planning for the supply and trading department. Later on, I went to the planning department in oil production. I was then assigned to the corporate planning department in PDVSA (PDVSA had adopted a similar organization as Shell). Under the board of directors there were coordinations (executive part of the holding) that took care of the planning and control of all the activities of the operating companies. The most important coordinations were, production, refining, supply and trading, human resources, finance and planning.


PDVSA [Petróleos de Venezuela S.A., the Venezuelan state owned oil and natural gas company] created a small company called Interven that I went to. After planning, I was in charge of the acquisitions of refining and marketing business to guarantee the sales of Venezuelan oil. I was in charge as a manager of the activities in the United States.


From there I was named board member of the PDVSA marine company that handled all the needs of transporting oil. In that company, I was in charge of the project for the construction and operation of eight new tankers specially designed to carry the largest possible load out of the Maracaibo lake. Very cool project.


Later on I was named to the board of Maraven in charge of Production and Exploration. My last years in the industry I did spend it in PDVSA as coordinator of corporate planning, supply, trading and domestic markets, and lastly finance. This position is equivalent to a CFO of any company.


*This interview was conducted via email. Due to length, there will be a second installment of transcript released within the month.