August 31, 2017 / 6:04 PM / in 2 years

Venezuela probing 'spectacular' overpricing in Orinoco oil contracts

CARACAS (Reuters) - Venezuela’s new chief prosecutor is investigating “spectacular” overpricing in a dozen contracts in the nation’s Orinoco oil belt, accusing his fugitive predecessor of turning a blind eye to embezzlement.

Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo

Prosecutor Tarek Saab said preliminary investigations showed $200 million was embezzled in a case involving 10 companies that were awarded contracts without tenders by former top executives of state oil company PDVSA [PDVSA.UL].

“This is important and spectacular overpricing,” Saab said at a news conference, adding that more money could have been involved.

PDVSA’s reputation has been tarnished in recent years by corruption investigations involving high-profile staff. The company has blamed the problems on a small group of employees and executives.

Last year, the opposition-led congress said $11 billion was lost at PDVSA between 2004 and 2014, when Rafael Ramirez was in charge of the company. He denied the allegations.

PDVSA did not immediately respond to a request for comment.

Saab did not accuse specific executives, but Pedro Leon led PDVSA’s Orinoco Belt development for years. Sources at PDVSA said he abruptly left at the start of the year. Local media said he fled Venezuela by boat.

The companies Saab accused of overpricing include Tradequip, apparently in reference to Tradequip Services and Marine, which is owned by Venezuelan businessmen Roberto Rincon. He has pleaded guilty to charges stemming from what the U.S. Justice Department called a large, ongoing investigation into bribery at PDVSA. U.S. authorities have traced more than $1 billion to the conspiracy.

Saab also named contractor Derwick Associates. Swiss authorities said in 2016 they had handed over bank records relating to the company at the request of U.S. authorities.

Tradequip and Derwick did not immediately respond to requests for comment.

Saab said he would call in all the companies’ owners for questioning. He said he had also requested information from PDVSA.

Venezuela’s opposition accuses authorities of selectively investigating corruption for political gain and said President Nicolas Maduro’s government had eliminated safeguards in the country with the world’s biggest crude reserves.

“They investigate those who fall from grace,” said opposition lawmaker Elias Matta, vice president of the congressional energy commission. Lawmakers had been discussing overpricing of Orinoco contracts for more than a year, he added.

Saab spent much of his news conference accusing his predecessor, Luisa Ortega, who broke with Maduro earlier this year and was removed from her job after accusing him of rights violations. She has fled the country.

“She had this case hidden in a drawer for a year,” Saab said.

Reporting by Alexandra Ulmer; Editing by Brian Ellsworth and Lisa Von Ahn

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below