Where Oil Is King, Should an Oil Man Be President?

Luis Giusti showed little surprise when the question was finally put to him last month: Was he, the head of Venezuela's state oil company, going to run for president?

"There have been many speculations ... my name has been mentioned, there are comments, jokes, but nothing concrete," Mr. Giusti said with a boyish smile. "I am entirely dedicated to PDVSA, and I have no time to do anything else."

But, he said moments later, "I'm not closing any doors."

In some countries the prospect of an oil man jumping from the boardroom to the presidential arena might seem far-fetched. But in Venezuela, where petroleum accounts for 24 percent of the gross national product, few people are more visible than the affable president of Petroleos de Venezuela, the world's third-largest oil producer.

"If there was any country where it made sense that an oil man could be president, it's Venezuela," says Gustavo Gabaldon, a longtime PDVSA director and friend of Giusti.

President Rafael Caldera cannot runs for reelection in voting this December.

Most political observers say Giusti, if he chose to run, would be a long shot for president behind Chacao Mayor Irene Saez, a former Miss Universe. But few doubt the future is bright for the man who orchestrated the opening of Venezuela's vast oil sector at a time when the country was starving for capital.

The apertura petrolera, or oil opening in the early 1990s, along with an aggressive push to increase production, helped PDVSA amass record profits last year of $4.7 billion. Multinational companies - who were kicked out when the industry nationalized in 1976 - have been elbowing past each other to get a crack at Venezuela, one of the most oil-rich and unexplored countries in the world. In the last round of auctions, companies pledged $2.2 billion to work 18 fields.

Giusti took over PDVSA in 1994, when the country was in crisis. The economy had been in a nosedive since President Carlos Andres Perez was impeached in 1993 for stealing $17 million in public funds. In 1994, two-thirds of the banking system failed, and the subsequent bailout by the government stimulated high inflation, which peaked at 103 percent in 1996.

"We were on the edge of the precipice," Mr. Gabaldon says. "And little by little, Venezuelan oil politics ... have become the salvation of the country."

Giusti spent 30 years fixing drill bits on oil rigs for Shell and managing exploration and production in PDVSA's subsidiaries. In the 1980s, he began an intense lobbying effort to reopen the oil sector to multinational companies, says Ricardo Penfold, Venezuela director of analysis for Santander Investment.

Lately, Giusti has been reorganizing PDVSA and making public appearances in Caracas and the US in a calculated effort to raise his profile, Mr. Penfold says.

One of his themes is the need for open and integrated markets in the hemisphere. "We cannot achieve sustained progress by solely looking inside," Giusti said at an energy conference last month.

Penfold and others say Giusti is waiting for an invitation from one of Venezuela's two major political parties.

Robert Bottome, editor of the Caracas business magazine VenEconomy, says Venezuelans wouldn't vote for Giusti because "people think oil people are arrogant and that anybody can make money pulling oil out of the ground."

But Gabaldon sees it differently, saying Giusti has an "ace in his hand" with voters in his managing of the oil industry.