“Without a stable market and fair price, oil investments become difficult,” said President Nicolás Maduro at Miraflores on November 4, 2016. During the televised transmission, the leader elaborated like a trophy on the amount of 10 billion dollars in private investments announced by Pdvsa, aimed at the Sovereign Oil Crop Plan, designed to recover the dramatic drop in production of the state-owned company.
Of this amount, one billion belonged to Oswaldo Cisneros, the Venezuelan businessman and owner of Digitel, who, sitting in front of Maduro, made his entry into the oil world clear that afternoon. The presidential mandate was no small task: Cisneros and his participation were expected to help triple crude production from some wells in Monagas within a period of five years.
But Cisneros was not alone there. On the road that led to the partnership of his company Delta Finance with Pdvsa to boost the creation of the mixed company Petrodelta (from the Orinoco Belt), he was accompanied by Alessandro Bazzoni. The first was linked to the scandal of the electrical purchases of Derwick Associates with the government of Hugo Chávez, and the second, an unknown Italian entrepreneur.
The signing of the agreement surprised observers in the oil business due to the unexpected entry of the telecommunications mogul, sidelining the other two entrepreneurs. The case portrays the eager determination of new players, even from other sectors, to financially support Pdvsa and thus enter its business, taking the places that traditional partners leave in the country, exhausted from dealing with a declining company amid a post-war economy.
Bazzoni confirmed that he is a minority partner of Petrodelta and advisor to the company Elemento LTD, which “only managed to market four ships for PDVSA between February and April of 2017.” Both denied having any business with Derwick Associates, which has been accused in multiple investigative journalism reports of defrauding the Venezuelan state with overpriced sales of electric plants.
Broken Mirror
In 2015, a year before the announcement in Miraflores, Cisneros and Bazzoni were already part of Petrodelta as directors of Harvest (the original partner of PDVSA in the mixed company), from which they had purchased a stake and designed a financing plan with the aim of repositioning the Argentine-origin company in Venezuela.
This entry into the business had its costs. It implicated that the company CT Energy Holding, controlled at that time by the three partners according to documents from the Security Exchange Commission (SEC), buy financial notes from Harvest for around 60 million dollars. Afterward, the total displacement of Harvest (which already wanted to leave the country) was accomplished by the Venezuelans who then became direct partners of PDVSA.
On PDVSA’s side, the path was cleared. Harvest had been trying for years to break free from its partnership with the state company, which was blocking its attempts by demanding more capitalization. “Harvest is an example of a partner that does not have the capacity (financially to invest in the oil business). They only want the dividend, not to invest,” said Eulogio Del Pino, then president of PDVSA, to Reuters.
When CT Energy arrived, cash-hungry PDVSA unblocked the path to the partnership. The Italian businessman had tried for several years to enter the oil business in Venezuela, and Harvest’s rush to exit the country was his opportunity. However, Bazzoni, due to his unknown background, raised suspicions among PDVSA officials, as stated by a former official of the state company. Additionally, he was struggling to secure financing. Until he partnered with Cisneros, the source commented.
Documents from the company registry in Barbados reveal a series of offshore companies with names similar to CT Energy Holding, which eventually established the mixed company Petrodelta with Pdvsa.
Others are based in Malta and Barbados. England is another location for two joint ventures: Elemento Solutions Limited and Elemento Services Limited. Records indicate that the nature of the companies is the buying and selling of oil.
Daycohost- Credit: www.daycohost.com
In the meantime, several of Bazzoni’s previous partners in oil financing businesses—Centauro, Chemoil, Saltpond, and Imperial Energy Ventures—began consultations in anti-fraud courts in Texas and New York, pointing to the Italian’s offshore companies for fund diversion, contract breach, and disrespecting jurisdiction agreements. One of them is demanding damages up to 21 million dollars.
From Barbados, Bazzoni’s downfall reached New York. On the Caribbean island, the businessman had incorporated a company named Cinque Terre Financial Group, which a judge ordered liquidated in April 2016 due to insolvency and debts. However, the liquidator of Barbados noted that despite the liquidation process having begun, Bazzoni opened subsidiaries of Cinque Terre (curiously named CT Energy LTD), both on that island and in Malta.
For now, almost nothing is known about the productivity of the alliance between PDVSA and these partners. More than a year after sealing their commitment to increase production, it remains a complete mystery whether these unconventional allies that formed Petrodelta contributed to the Oil Crop Plan.
