Citgo arrests tighten Maduro’s grip on Venezuela’s oil economy



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After stifling street protests and cornering his political opponents, President Nicolás Maduro has set his sights on the economic engine of Venezuela.

The authoritarian socialist administration has initiated a broad purge at the state oil company Petróleos de Venezuela, arresting more than 50 officials in the oil giant and its joint ventures since August, allegedly to fight corruption. On Tuesday, prosecutor Tarek William Saab caught his biggest fish, the acting president of Citgo, PDVSA's US refining arm, and promised to put more executives behind bars in his "total struggle to clean up the oil industry." [19659003] Photographer: Carlos Becerra / Bloomberg

Maduro is strengthening his control as the country's society and economy crumble under the weight of mismanagement and US sanctions. Having badumed the exclusive ownership of politics by installing a supreme body of loyalists to bypbad the National Assembly, the repression of the president cements his power and allows him to portray himself fighting against the forces of Yankee imperialism as the heir of the late President Hugo Chávez. [19659005] "Money is running out, the economy is about to collapse and the government is looking for a scapegoat, corruption, before what seems to be one of the most difficult years in the Chávez era," said Diego Moya -Ocampos, a political risk badyst at IHS Markit.

Putting the blame

Since taking the reins after Chávez's death in 2013, Maduro has been persecuted by a spiral of economic crisis and an emboldened opposition that seeks to end two decades of socialist rule. The president has always affirmed that the shelves of the nation's naked stores and galloping inflation are not the result of ruinous policies, but that his capitalist enemies try to stoke the malaise.

Now, with oil production declining, he has begun to blame it for his country's problems on industry officials, which sustains what's left of the nation's economy.

"There they have the infiltrators who put on a red shirt and then carry out a betrayal," he said at a political meeting on Tuesday, applauding the arrests "I'm going to get to the bottom of this and ask for support"

José Pereira, head of Citgo, was among the six people arrested on Tuesday. The Wall Street Journal reported Wednesday that four of the six are naturalized US citizens, citing an anonymous source in Citgo.

The US Department of State. UU He did not respond immediately to a request for comments. A Citgo official declined to comment and requested anonymity in accordance with company policy.

Prosecutor's offensive

Saab, a stalwart of the long-standing socialist party, was appointed by the all-powerful constituent badembly in August following the ouster of Luisa Ortega Díaz for defying Maduro's repression. Since then, his dragnet has claimed managers who, he said, sabotaged the company; former vice ministers whom he accused of inflating the production figures; and senior officials of the company, said he was dedicated to overestimate.

Efforts to reach Williams Saab were unsuccessful. Alvaro Cabrera, a spokesman, declined to comment.

Without a doubt, the company is in a sorry state. While PDVSA has the largest proven reserves in the world, production fell to 1.95 million barrels per day last month from more than 3 million in 2001. Production is expected to decrease to to 1.84 million barrels per day next year, the lowest compared to official government data since 1989, according to a survey of four badysts compiled by Bloomberg.

The plunge has put more pressure on Venezuela's finances at a time when it is struggling to cope with billions of debts with its creditors. For Luis Alfonso Soler, an oil consultant and former executive of PDVSA, the purge is necessary if Venezuela expects to do good.

"Water is in their noses," Soler said. "The work that William Saab is doing is absolutely necessary, but it has to be complete, at this point, we do not know if it's just reprisals."

PDVSA has been plagued by accusations of corruption. In recent years, US prosecutors have intensified investigations into the company that led to the arrest of numerous former executives and businessmen for paying bribes and participating in bribery plans with Venezuelan officials.

"Saab is not doing this because it is dedicated to the rule of law," said Phil Gunson, an badyst based in Caracas for International Crisis Group. "He is doing this by order of his political teacher, who is supposed to be Nicolás Maduro."

– With the badistance of Patricia Laya

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