Wed, 07 Jun 2023

Venezuela: Monomeros Sale on the Table Amidst Conflicting Reports

25 Mar 2023, 23:28 GMT+10

Caracas, March 25, 2023 ( - The Nicolas Maduro government could be on the verge of selling Colombia-based Monomeros Colombo Venezolanos.

Colombian ambassador to Venezuela Armando Benedetti broke the news during a summit in Barranquilla this week, telling business representatives that Ecopetrol would reportedly purchase the strategic agrochemical company for US $300 million. He also presented an alternative scenario where only 51 percent of shares would be acquired.

However, on Friday afternoon Ecopetrol, which is 90 percent owned by the Colombian state, issued a statement claiming that it had not "engaged in talks" towards acquiring Monomeros.

The Colombian corporation is undergoing changes at the top, with chairman Felipe Bayon set to be replaced by Alberto Consuegra Granger on an interim basis beginning on April 1. Bayon had expressed disagreements with Petro's government and voiced concerns that Ecopetrol was becoming "politicized."

Neither Bogota nor Caracas have publicly commented on Benedetti's announcement. Maduro and Petro met in Caracas on Thursday for a "work meeting" but there was no further information nor a joint statement released to the media.

With industrial complexes in the Colombian towns of Buenaventura and Barranquilla, Monomeros is currently owned by Venezuelan state petrochemical company Pequiven. In 2006, the Chavez government bought shares from Ecopetrol and Dutch firm Koninklijke DSM to become the sole proprietor of the firm.

A return to Ecopetrol, which according to Benedetti could take place in the coming weeks, would mark the end of a tumultuous period for the company.

In 2019, the Ivan Duque government seized Monomeros and handed it to the self-proclaimed "interim government" run by Juan Guaido. It was part of a US-led multi-pronged regime-change effort against the Maduro government.

In nearly four years under the management of the hardline Venezuelan opposition, the enterprise was at the center of a number of corruption scandals as different factions sought to profit off of the asset. According to an opposition insider, the different political parties treated Monomeros "like a pinata."

Troubled finances, suspicions of irregular dealings and mounting debt saw the company intervened by Colombia's Corporation Superintendency in September 2021 while anti-government factions traded corruption accusations.

Following Petro's electoral victory in June 2022 and a swift reestablishment of diplomatic ties with Caracas, Monomeros was soon returned to the Venezuelan state.

With a new board of directors in place, Pedro Tellechea, president of Pequiven, visited the corporation's headquarters in September and announced a "new chapter." Tellechea has since been appointed to run state oil company PDVSA and the oil ministry.

The Maduro government likewise pointed the finger at the opposition for the firm's difficult situation and low productivity. The Attorney General's Office issued 25 arrest warrants for individuals allegedly involved in embezzlement at Monomeros.

Nevertheless, the enterprise's reduced output coupled with the rise of fertilizer prices worldwide saw several Colombian officials publicly acknowledge Monomeros' strategic importance and float the idea of acquiring it or buying more than 50 percent of shares.

Another possible source of urgency for Petro might be staving off potential US sanctions. With the company under Venezuelan opposition control, the US Treasury Department issued sanctions waivers, with the current one set to expire in June 2023. Washington has not clarified whether Monomeros' return to the Venezuelan state would have it targeted like virtually all state-owned entities. An Ecopetrol majority stake would sidestep the issue.

According to Colombian media outlets, Monomeros held a fertilizer market share between 35 and 40 percent in recent years. It reportedly supplied 50 percent of the fertilizers and 70 percent of the agrochemicals used in coffee, potato and palm oil production.

While any possible sale has yet to be confirmed, different sources place the company's worth at US $600 million. Before 2017, when wide-reaching US sanctions began, it yielded as much as $500 million in yearly profits. However, it would require significant investment to ramp up production to past levels.

Monomeros is Venezuela's second most valuable foreign asset, after CITGO. The US-based refiner is currently at risk of being broken to pieces and seized by creditors as a result of Washington's sanctions, disputed judicial rulings and questionable practices from the Guaido opposition.

Ricardo Vaz | source: venezuelanalysis

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