Published by Emerging Markets

The rival to Hugo Chávez in Venezuela’s presidential elections has pledged a sweeping review of the operations of the country’s giant state-owned oil company, PDVSA.

In an interview with Emerging Markets, opposition leader Henrique Capriles Radonski said one of his actions on winning power would be to order a review of its finances and operational capability.

But he pledged to keep the company under state ownership, matching the government’s commitment. “It is necessary that the Venezuelan state retains ownership of PDVSA and strengthens its technical and operational capacity,” he said.

“Among our first actions will be reviewing the financial and operational situation of PDVSA, to ensure that agreements with foreign companies tally with the interests of the nation.”

Last year the US government imposed sanctions on PDVSA for selling gasoline to Iran in contravention of measures in response to country’s nuclear programme.

Meanwhile PDVSA’s debt issuance has risen sharply in recent years as Chavez’s socialist government has increased spending on social policies targeted at the poor, backed by funds from one of the world’s biggest oil companies.

Capriles said the oil industry was an essential driver of economic growth but insisted the industry should be a “spring-board” for diversification of the Venezuelan economy.

“For a country to progress requires everyone, including the private sector. This is a joint effort between public and private. We will generate the confidence so investors to not hesitate to choose Venezuela,” he told Emerging Markets.

He also gave a strong hint he would not hike the price of petrol, which is heavily subsidized. “We cannot increase the gasoline price in one fell swoop,” he said.“It’s crazy. Inflationary impact is very strong. It is no secret that our gasoline is the cheapest in the world.”

He also ruled out devaluing the bolívar. “This has been done a few times and the impact on inflation has greatly affected our people, he said adding: “We will take steps to promote employment and progress for our people.”

Capriles was speaking a fortnight after red-shirted gunmen opened fire at the candidate, his team and supporters during a rally. They injured the son of an opposition legislator standing very close to Capriles.

Capriles is seen as the first politician to have a serious chance at taking down the Chávez government in this year’s elections. An opinion poll taken just before Capriles was chosen as the joint opposition candidate in a primary found a gap of less than five percentage points between Chávez and the as-then undetermined winner of the opposition vote.

Capriles remained nonchalant about the event. “It’s the same story we’ve seen before in Venezuela,” he said. “They used violence to intimidate us but we’ll continue our journey ... because my commitment is to Venezuela.”

The incident has failed - at least ostensibly - to slow his momentum. “The shooting was not important at all,” said Carlos Romero, a Caracas-based political analyst who works at the Central University of Venezuela. “It is part of the game.”

Chávez is in Cuba recovering after the removal of another cancerous lesion, causing worry amongst supporters as to his ability to govern for another six year term.