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Iside track on Ex oil minister and PDVSA president Delpino, dictador purge on veteran oil hands



By Alexandra Ulmer

Petroleumworld 12 04 2017

CARACAS, Dec 1 (Reuters) - Days before masked agents arrested him, family and friends pleaded with Eulogio Del Pino to flee, warning that he could be next among executives detained or pursued, one after another, in a mounting purge of Venezuela's faltering oil industry.

But the former oil minister, detained by police before dawn on Nov 30, was reluctant to believe he could soon be among those targeted in what President Nicolas Maduro has characterized as a cleanup of the all-important sector.

“I told him: ‘Go!',” said one of three people who described the leadup to the former minister's detention. “But he told me ‘I haven't done anything wrong. I trust that they're not going to do anything bad to me.'”

That trust, the product of three years in which Del Pino held the top two jobs in Venezuela's oil ministry, now appears alarmingly misplaced. Maduro is charging Del Pino and many other former industry executives with corruption and blaming them for economic woes now crippling the Andean nation.

“I‘m not going to shield anyone,” Maduro said in a speech on Nov 28, as he swore in a general who replaced Del Pino as oil minister. “If you're corrupt, you have to pay with jail and return what you've stolen.”

The crackdown has led to uncertainty, panic and paranoia across the sector, with as many as 65 former executives arrested over the past four months. Prosecutors, critics say, have provided scant evidence for the charges.

Corruption has long plagued the OPEC member's oil industry and much of the broader Maduro government, a leftist administration struggling with an imploding economy, soaring crime and debilitated public services.

But critics of Maduro's beleaguered administration, and many within the oil industry itself, see the purge as nothing more than an effort to eliminate rivals within the sector and consolidate control ahead of presidential elections next year.

“Maduro wants control of PDVSA and control of its cash flow,” said opposition legislator and economist Angel Alvarado, using the initials for state-controlled oil company Petroleos de Venezuela SA.

Venezuela's Information Ministry did not respond to a request for comment. PDVSA and the oil ministry did not respond to requests for comment either.


It is not clear whether any of the charges against Del Pino are substantiated. Prosecutors, without presenting any evidence, accused him of belonging to a “cartel” that operated a roughly $500 million corruption scheme in the western state of Zulia.

But the Stanford-educated engineer, who led the ministry until Nov. 26 and PDVSA for three years before that, was previously known as a government loyalist, committed to Maduro's vision for “21st century socialism.”

Only after he was ousted from the ministry, the three people familiar with his arrest said, did Del Pino finally begin to believe that his time was probably up. His final days as a free man illustrate how swiftly fortunes can shift for even senior officials in Maduro's government. Just after his firing, Del Pino told Reuters in a WhatsApp message: “I need a rest.” On Nov. 29, three days after his ouster, an exhausted Del Pino went to Avila, a verdant mountain that towers over Caracas, the capital, where he liked to hike, one of the people said. Del Pino found a quiet spot under a tree and recorded a video on his cell phone. He said he believed he was about to become a “victim” of an “unjustified attack.”

Before sunlight the following morning, hooded and armed military intelligence agents burst into his home and arrested him. Footage of the detention showed Del Pino wearing the burgundy-colored soccer shirt of Venezuela's national team.

Later that day, the video Del Pino recorded appeared on his Twitter account. “I hope the revolution will give me the right to a legitimate defense,” he said, referring to the government in the militant terms embraced by Maduro.

Del Pino did not respond to requests for comment on WhatsApp, where he had recently changed his profile picture from one of him in a PDVSA hat to one of his children.

After Del Pino's detention, stunned workers at PDVSA's Caracas headquarters, where he was generally well-liked, watched the state TV footage on screens in company elevators.

Fear has gripped employees at both institutions, according to a half-dozen current and former PDVSA insiders as well as foreign oil executives. Managers are scared to sign routine documents in case it could be used against them.


Maduro promoted Del Pino, who was born in the Canary Islands and holds a Spanish passport, from PDVSA's exploration and production division to the company's top job in 2014.

At the time, foreign oil executives and analysts largely welcomed the arrival of the genial and low-profile technocrat. He replaced Rafael Ramirez, a once-powerful loyalist of the late Hugo Chavez, Maduro's predecessor.

Ramirez, who dominated Venezuela's oil industry for a decade, sought to make PDVSA “redder than red.” He urged workers to wear red shirts in support of Chavez's socialist movement and to attend pro-government rallies.

Del Pino, by contrast, eased up on revolutionary garb and attendance at militant gatherings. He also sought closer relationships with foreign partners frustrated by currency controls and a lack of professionalism at PDVSA.

Still, many PDVSA insiders and oil executives were ultimately disappointed with Del Pino's management. Instead of improvements, he presided over a major production fall that brought Venezuela's oil output to near 30 year-lows.

Del Pino ultimately found his hands tied at a company where intervention by the government is common. Last January, Maduro replaced many of his top executives with political and military appointees.

Whether Del Pino and other arrested executives are ultimately found guilty or not, many in Venezuela see opportunism behind the ongoing purge, not a concerted effort to stamp out graft.

The industry, after all, has been under tight control of the ruling Socialist Party since shortly after Chavez came to power in 1998.

Although the government ridiculed a report last year by the opposition-run Congress, finding that some $11 billion went missing at PDVSA over a decade, it now recognizes that many voters support the anti-corruption stances espoused by rivals.

“The opposition has been pushing for a fight against corruption, and now Maduro wants to appropriate that,” said Alvarado, the opposition lawmaker.

After surviving major protests this year and pushing through a controversial pro-government legislative superbody, Maduro is feeling empowered, government officials said. He seeks to fortify his position for re-election next year.

He is also expected to continue finding ways to target perceived threats to his political power. Some in Venezuela see Del Pino's arrest as a way of getting at an old rival: Ramirez, the former PDVSA boss.

Ramirez, until recently Venezuela's envoy to the United Nations, is believed by many in the government to have presidential ambitions.

Although Ramirez has not been mentioned by prosecutors, senior government officials increasingly refer to his time at PDVSA as a period when “mafias” were formed and executives like Del Pino grew ascendant.

This week, after Ramirez criticized the president in recent opinion articles online, Maduro fired him and summoned him back to Caracas, according to people familiar with the clash.

Late Friday, police arrested Diego Salazar, a relative of Ramirez, in what prosecturos said was another corruption investigation.

Ramirez did not respond to a request for information on Friday. (Additional reporting by Marianna Parraga in Houston. Writing by Alexandra Ulmer.; Editing by Andrew Cawthorne and Paulo Prada.)

Story by Erwin Seba; Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D‘Silva and Andrew Hay from Reuters.

reuters.com 12 01 2017

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