Read an updated version here. Petróleos de Venezuela, commonly known as PDVSA, is a state-owned oil conglomerate in Venezuela. Despite much contrary propaganda, it was established in 1976 by then-president Carlos Andrés Pérez as part of a nationalization policy that granted Venezuela complete control over the exploration, production, and commercialization of its natural resources. In the years that followed, aided by visionary strategies from Venezuelan oil professionals, PDVSA transformed into a vertically integrated company. The high-sulfur, low-quality oil extracted was primarily transported using Venezuela’s own fleet of tankers to refineries around the world, where it was then converted into gasoline, asphalt, and other more commercial derivatives. This was a success story, one of the few state-owned oil conglomerates that were highly profitable and well-managed globally. But then, Hugo Chávez came to power.
In 2002, shortly after a constituent assembly dismantled all established institutional power, the country was “rebuilt” from scratch under Chávez’s directives. PDVSA, which had been professionally managed since its inception, found itself at the center of this upheaval, as it was effectively the nation’s economic engine and the source of nearly all its wealth. It became imperative for Chávez to seize control, which he did by firing the upper management of national television at PDVSA. Further resistance was eliminated by dismissing another 20,000 PDVSA employees, nearly half of its workforce at that time.
PDVSA then became the funding source for Chávez’s revolution. Its resources and revenues have been siphoned off by the regime ever since. Production and productivity plummeted. The workforce tripled with non-oil personnel. Heavily in debt, PDVSA was compelled to seek international partnerships as its oil production capacity dwindled over time. With a capital hemorrhage caused by gasoline subsidies and oil gifts to Chávez’s international political allies, PDVSA now stands as a mere shadow of its former self. However, corruption in PDVSA’s procurement processes has flourished to unprecedented levels in this context.
#OpenPDVSA is an attempt to shed light on some of the details published by PDVSA. By discarding thousands of procurement contracts and correlating the information with other public databases, I am in the process of establishing connections that would otherwise be straightforward. The data seems to primarily relate to procurement contracts awarded by PDVSA between 2012 and 2015.
During this three-year period, the largest single contract amounting to approximately $929 million was awarded to a contractor that doesn’t even exist. It is quite possible that the sums have been inaccurately reported, thus more investigation is needed. However, while a comma or a point may have been missed in the figures, contractor names and their tax numbers are less likely to contain errors during transcription. For instance, the procurement contractor Iker Guarima, with tax ID J-293799005, lacks a company website, registration in Venezuela’s contractor registry, any online presence, or background, yet appears to have been awarded nearly a billion dollars by PDVSA in August 2014 to supply materials for social housing projects from various contractors of the Ministry of Housing and Habitat. None of the sources I consulted have knowledge of Iker Guarima, raising further questions, such as: why is PDVSA hiring suppliers for the projects of the Ministry of Housing and Habitat?
The third-largest contract—worth $730 million—was awarded to Constructora INCENTER. This company belongs to a familiar face for readers of this site: Antonio “Tony” Canaves, a partner of the Colombian “businessman” Alex Saab. Did I mention that Canaves is suspected of involvement in a murder and has been arrested for drug trafficking?
Then there’s the Moschella clan from Maracaibo (Zulia state). Through different companies (INDUSTRIAS MARÍTIMAS VENEZOLANA DE CONSTRUCCIONES, ZULIA CONSTRUCCIONES INDUSTRIALES, TIERRA ALTA SISTEMAS DE PRODUCCIÓN, and EHCOPEK), this group managed to obtain $1.160 billion during the three-year period. The Moschella group seems to be linked to a favorite banker of the Chávez regime: Víctor Vargas from Banco Occidental de Descuento. Mr. Vargas himself has also secured contracts worth approximately $614 million in energy-related businesses through SOLUCIONES AMBIENTALES DE VENEZUELA, which has been awarded many contracts from PDVSA over the years.
Another oil tycoon’s maneuvers came to light: Gerardo Pantin Shortt, whose companies Cementaciones Petroleras Venezolanas (CPVEN) and SEPESA S.A. received $1.140 billion through 30 contracts. Mr. Pantin was in the news today for owning a $12.9 million mansion on Sunset Island and being the developer behind a $200 million real estate project in Miami. It appears that corrupt money laundering from Venezuela continues at full pace in Miami, despite announcements from the U.S. Treasury. Mr. Pantin and his associate Oswaldo Cisneros purchased Maersk’s barge operations in Venezuela in September 2014. Mr. Cisneros, in turn, is a partner of Derwick Associates in acquiring a stake in Harvest Natural Resources through debt purchase.
The total amount of contracts awarded by PDVSA from 2012 to 2015 exceeds $30 billion. This figure only pertains to procurements linked to non-secret operations of PDVSA. It must be recalled that in some cases, PDVSA has claimed non-disclosure based on “national security threats” to withhold contract information, as seen in its infamous agreements with Derwick Associates.
The entry #OpenPDVSA was first published on El Faro del Morro.