ABSTRACT
This chapter aims to identify the international and the domestic contexts to the formulation of Petroleos de Venezuela S. A. ’s (PDVSA) internationalisation policy leading to the signing of the contract with Veba Oel. It analyses the decision-making process that characterised the negotiation. PDVSA interpreted the measure as a constraint to its decision-making freedom, an obstacle to the implementation of its corporate goals. An across-the-board reduction in PDVSA’s expenditure levels and the implementation of the initial financing scheme proposed by the executive were able to avoid a cash flow crisis in the short term. As of early 1979 the economy was showing alarming signs, as the windfall effects of the 1974 First Oil Shock had dwindled. After the windfall effects of the Second Oil Shock had worn off, the economic policy implemented by the Herrera Campins administration reflected the desperate needs to minimise the impact of the crisis affecting Organisation of Petroleum Exporting Countries members.
