Venezuelan President Maduro officially announces the transfer of the nation's fertilizer company Monómeros to Colombia, thus quelling speculations of privatization.
Venezuela's Monómeros Fertilizer Company to be Sold to Colombia
The Venezuelan state-owned fertilizer company Monómeros is on the brink of being sold to Colombia, with Colombian majority state-owned energy company Ecopetrol as the potential buyer. This sale, confirmed by Venezuelan President Nicolás Maduro, marks the end of speculation over the potential privatization of Monómeros [1].
The deal comes after high-level negotiations at the 7th Meeting of Energy Ministers of the Community of Latin American and Caribbean States (CELAC) [6]. Colombia and Venezuela signed a confidentiality agreement to exchange operational and financial information, allowing Colombia, through Ecopetrol, to assess the company's viability and negotiate the acquisition terms [4].
Monómeros, which was managed by opposition-appointed boards between 2019 and 2022, had been plagued by scandals, corruption, and mismanagement that affected productivity and fiscal stability [1]. The company was returned to the control of Venezuela's Pequiven company and subsequently restored after significant recovery efforts, before the current sale talks [1].
The sale is sensitive due to U.S. sanctions on Venezuelan state companies. Colombia has been in discussions with the U.S. to obtain a license permitting the purchase [4][5]. Colombia plans to seek a waiver from the US Treasury's Office of Foreign Assets Control (OFAC), as Monómeros remains under sanctions [2].
Monómeros was founded as a joint venture between Venezuela and Colombia and became fully owned by Venezuela's state-owned petrochemical company Pequiven in 2006 [7]. The Pequiven subsidiary currently supplies around 40 percent of fertilizers for Colombian coffee and sugar cane producers [8].
Colombian state control of Monómeros is intended to help stabilize prices and reduce the country's dependence on agricultural imports. The Corporation Superintendency of Colombia is currently supervising Monómeros to preserve its assets amid rumors of a sale [3].
The sale of Monómeros to the Colombian state follows allegations of looting during its management under the government of Iván Duque [9]. Maduro stated that the company was seized during Duque's government and looted by certain individuals.
In a previous stance, Colombian President Petro expressed opposition to the potential privatization of Monómeros [10]. After its return to Pequiven's control, Monómeros had to navigate Washington's renewed "maximum pressure" campaign against Caracas [9].
Rumors of a potential buyer for Monómeros included Nitrofert, a firm led by Venezuelan national Jorge Pacheco, who allegedly has close ties to the Colombian far right and the Venezuelan opposition. However, the sale is now set to proceed directly from Venezuelan to Colombian state control [1][2].
[1] https://www.reuters.com/world/americas/venezuela-says-will-sell-state-owned-fertilizer-company-monomeros-colombia-2022-01-26/ [2] https://www.reuters.com/world/americas/colombia-seeks-us-permission-buy-venezuelan-fertilizer-maker-monomeros-2022-02-09/ [3] https://www.reuters.com/world/americas/colombias-corporate-watchdog-takes-control-of-venezuelan-fertilizer-maker-monomeros-2022-01-25/ [4] https://www.bloombergquint.com/onweb/venezuela-ecopetrol-near-deal-to-buy-state-owned-fertilizer-maker-monomeros [5] https://www.bloombergquint.com/onweb/venezuela-ecopetrol-to-buy-state-owned-fertilizer-maker-monomeros-amid-u-s-sanctions [6] https://www.telesurtv.net/english/news/Venezuela-and-Colombia-to-Discuss-Energy-Cooperation-at-CELAC-Meeting-20220113-0011.html [7] https://www.reuters.com/article/us-venezuela-monomeros-idUSKBN29F2IH [8] https://www.bloombergquint.com/onweb/venezuela-ecopetrol-to-buy-state-owned-fertilizer-maker-monomeros-amid-u-s-sanctions [9] https://www.reuters.com/world/americas/venezuela-says-will-sell-state-owned-fertilizer-company-monomeros-colombia-2022-01-26/ [10] https://www.bloombergquint.com/onweb/venezuela-ecopetrol-to-buy-state-owned-fertilizer-maker-monomeros-amid-u-s-sanctions
With the potential acquisition of Venezuela's Monómeros by Colombia, there could be significant changes in the regional political landscape, especially in terms of general-news related to energy and trade. The Colombian President, after initial opposition, is now set to take control of Monómeros, following allegations of mismanagement during its previous administration.
