En Español

Very usefull links





Business Partners





FxHQ Forex News

The Global Barrel

Tiempo Cultural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links




Dow Jones

Oil price



Views and News




Inside, confidential and off the record




Ex PDVSA's CEO lock up

Oil is not longer the Dictador's support (is China's oil and our blood)


How my powerful Venezuela oil connection ended up in jail

In Quito, Ecuador a while back, while providing a risk assessment workshop for officials from Latin American oil companies, I was able to spend several days in private conversations with Venezuela's Minister of Oil.

Now heading up the national oil company PDVSA, he was considered one of the most knowledgeable and able of the region's execs at the time.

During our talks, he shared some useful advice on how to integrate the national oil company budgetary requirements with the vortexes of national politics.

At one point, over a late-night drink, he confided the following: "You are always in a no-win situation when it comes to insulating working capital from central budgets," he declared. "You have to provide for the next round of drilling. For that, proceeds from sales must be segregated. But the politicians can only see buying the next election."

We were to renew the conversation later when I was scheduled to provide a similar seminar at the invitation of PDVSA.

However, by the time that was to take place, the domestic civil strife in Venezuela had intensified.

The government admitted they could not provide sufficient security for my appearance in the eastern, oil-producing region where the meeting was to take place, while the U.S. Department of State chimed in advising that I should not go.

And yesterday, my "drinking colleague," - or Eulogio Del Pino, as the world knows him - was arrested at his home in Caracas.

This is one of the latest in a series of arrests orchestrated by embattled President Nicolas Maduro.

These arrests will only further fuel the financial crisis in the country, constrict access to the working capital needed to drill for oil, and exacerbate PDVSA's production decline.

That means a large chunk of the almost two million barrels of oil that Venezuela supplies every day could disappear...

And send oil and gasoline prices skyrocketing with it when they do.

Maduro claims there is a "cartel of organized crime" intent on spreading graft and undermining the national energy sector.

His political opposition charge the president with a desperate attempt to purge those who have criticized his leadership.

Let me say upfront that I have no personal knowledge of whether the graft charges are true or which side has the upper hand in the telling of truths about what is occurring internally in Venezuela.

After experiencing the last year in American politics, we certainly have no right to lecture to others.

But I do recall what Eulogio told me back in Ecuador.

It involved two energy matters that brought the latest wave of political arrests in Venezuela.

And both have resulted in Maduro seeking out opponents to pillory...

  The Real Reason Behind PDVSA's Recent Arrest Spree

The first is a contentious financial deal for Citgo refineries in the U.S.

The second is Petrozamora S.A, a joint venture with Russian banking major, Gazprombank (itself, an arm of state-run natural gas giant Gazprom and oil major Gazprom Neft).

Del Pino is closely involved in the Petrozamora affair, while another well-known oil exec - Nelson Martinez - headed up the Citgo network both while PDVSA owned it, and after sales began to other interests.

However, the president's real political target in Caracas may actually be Rafael Ramirez.

Ramirez is the former Venezuelan oil kingpin, a close ally of U.S. interests in the area, and the most likely opponent for Maduro - should there ever again be democratic elections in the country.

Ramirez has been the mentor of both Del Pino and Martinez as they rose through the ranks of the Venezuelan oil hierarchy.

Speculation has already begun that yesterday's arrests were more to pressure Del Pino and Martinez to turn "states evidence" against their former patron.

These latest moves follow the arrests of more than 60 others within PDVSA- casting a chilling silence over the national oil company, to say the least.

None of my current contacts there will answer any messages these days.

According to Maduro, the issue surrounds billions of dollars in corruption within PDVSA, its arrangements with foreign companies and finance, as well as its administration of assets held abroad (like the Citgo refineries in the U.S.).

Others, however, charge that the real problem results from an increasingly desperate political leadership with its own "private accounts" in which public revenues are being siphoned while the central budget implodes under the weight of its own red ink.

The situation has only been intensified by the technical default into which both PDVSA bonds and Venezuelan sovereign debt (much tied to that PDVSA paper) have fallen after Caracas failed to pay interest as scheduled.

Eulogio also didn't help his standing with Maduro when he went public with an opinion that Venezuela needs to own up to its foreign debt obligations.

There was, of course, another reason for that position...

PDVSA's Transparency Problem

PDVSA is in desperate need of securing finance to fund ongoing operations.
Crude oil sales remain the dominant source of the country's revenues.

And this brings us back to the advice he gave me years ago.

With normal international finance markets closing to PDVSA, designing foreign ventures to obtain the working capital necessary for drilling becomes the only genuine option.

Petrozamora may well have been in that category.

By directing the finance to projects, PDVSA kept the lights on and workers paid.

But it did so at the expense of inciting the ire of the president and his cronies.

This morning, PDVSA was taken over by a general loyal to Maduro.

That means we should not expect any transparency anytime soon.

It also means something else...

Given the recent experience with debt payment defaults, I would be concerned if I was representing a Russian bank or energy major who thought they had some paper control over assets inside Venezuela.

Under the rule of Maduro, such papers have an irritating habit of disappearing... along with the Venezuelan officials who signed them.

ISSUES.... 12/ 04/ 2017 - Send Us Your Issues

Inside, confidential and off the record

Is an independent journalist effort from Petroleumworld, on Inside, Confidential and Off The Record Information, the views are not necessarily those of Petroleumworld

Follow us in : twitter / Facebook

Send this story to a friend Copyright© 1999-2017. Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ stories by anyone provided it mentions Petroleumworld.com as the source. Other stories you have to get authorization by its authors.Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feed. back is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8 +/ 800x600 pixels




Contact: editor@petroleumworld.com/Telephone:(58 414) 276 3041

Elio Ohep.

Director & Producer: Elio Ohep

Contact: editor@petroleumworld.com

Advertising:Malena Vasquez:58 412 952 5301
Technorati Profile PW in Top 100 Energy Sites

CopyRight ©1999- 2017, Petroleumworld ™  / Elio Ohep- All rights reserved
Legal Information This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from Petroleumworld or the copyright owner of the material.Internet Web links to http://www.petroleumworld.com are apreciated.Petroleumworld no se hace responsable por los juicios de valor emitidos por esta publicacion, por sus colaboradores y columnistas de opinión y análisis. Aceptamos colaboraciones previa evaluación por nuestro equipo editorial, estamos abiertos a todo tipo o corriente de opiniones, siempre y cuando a nuestro juicio esten dentro de valores éticos y morales razonables. Petroleumworld alienta a las personas a reproducir, reimprimir, y divulgar a través de los medios audiovisuales e Internet, los comentarios editoriales y de opinión de Petroleumworld, siempre y cuando esa reproducción identifique a la fuente original, http://www.petroleumworld.com y se haga dentro de el uso normal (fair use) de la doctrina de la sección 107 de la Ley de derechos de autor de los Estados Unidos de Norteamérica (US Copyright) Internet Web links hacia http://www.petroleumworld.com son apreciadas.