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Venezuela’s Black Box in Havana

By Teodoro Petkoff | Tal Cual

Caracas, 3 May 2005 | Why a PDVSA office in Cuba? Under “normal” circumstances there would be nothing strange about that. PDVSA is a transnational corporation which conducts business on five continents, and owning offices in different places is essential for the extent and volume of its operations. But to set up an office in a country that is a stone's throw away from ours and whose oil trades amount to a "tiny crumb", while arguing that from there "we will better manage our trading activities in the Caribbean” is not credible. Does this mean that Venezuela is not also a Caribbean country? Does this mean that sales to Jamaica and the Dominican Republic are more easily made from Havana than from Caracas?

As with all governmental moves, this one has not been explained to the country either, and we do not have the kind of Parliament that will look into it, thus there is no other choice than to tie loose ends in order to see where the shots are coming from. A few weeks ago we published in Tal Cual a confidential report about the serious irregularities which have been taking place in the marketing of our oil.

The report earned us a reply from Engineer Asdrúbal Chávez, who occupies, among other posts of great power, one in marketing management. We published the complete reply and since then, for certain, we have been waiting for him to accept our telephone calls in order to confirm the invitation he extended to us, to visit his offices and discuss the subject. A curious detail: Engineer Chávez is a cousin of the President and although he is not a parachutist in the industry, where he has been for many years, the power he is now accumulating never ceases to be capricious. Coincidentally, his cousin is this country’s President.

Well then, the crux of the matter concerning the denounced irregularities lies in the now novel presence of traders ("intermediarios") in our operations of selling crude and derivatives. PDVSA rules, still in force, restrictively establish that the company does not perform any transactions through any traders but rather directly with end clients. (Quite tellingly, following our denunciations, they removed from the PDVSA website the regulations on "HOW TO DO BUSINESS WITH PDVSA”, where the long-standing rule appeared.) In his response, Asdrúbal Chávez not only did not deny our assertions, but rather admitted that, should traders bring in their own clients, PDVSA will “now” do business with them. Thus, there is now a swarm of traders buzzing around PDVSA, one which makes arrangements for approximately one million barrels of oil a day, with discounts of 2 to 3 dollars. To think that one of the "nationalist" arguments for selling CITGO was that of the discounts which the head firm was extending to its own subsidiary in the United States!

Just who are those traders?

How did they get into the business? How is the loot being split up and distributed? The Miami Herald published a list of them and Energy Minister Ramírez announced, of course, a lawsuit against the daily. Some managers from Maracaibo, high flying executives, fired a while ago, assured that that “battle against corruption” which the Minster bandies about is but a smoke screen, meant to hide crafty behaviors such as those we describe today.

Inside of this labyrinth through which pass PDVSA business dealings, it occurs to us to believe that an office in Cuba does not seem to be a bad safe haven (guarimba*) for expediting these novel company marketing operations with such traders, who, by the way, have made colossal fortunes during these times in which, according to official philosophy, "it is bad to be rich."

Translation by W.K.

*Translator’s note: "guarimba" is a term very relevant to these times in Venezuela. The term originally referred to the hiding place in the Venezuelan children’s traditional game of hide and seek. Now "guarimba" is a Venezuelan form of protest that has been implemented by groups of citizens to condemn government's actions and supposedly protect neighbourhoods, sometimes in defiance of authority. Usually non-violent, but almost always chaotic.

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