Photo: Reuters

Since the dawn of the catastrophic Quevedo Era in PDVSA, we’ve been hearing the same thing: the oil industry’s paralyzed because managers are terrified of doing anything. The ongoing purge of managers suspected of “corruption” has left the oil industry incapable of doing even normal, routine things because everyone is scared that any signature they put down will land them in jail. An air of menace pervades the halls of La Campiña, and as PDVSA seizes up administratively, oil production falls off a cliff.

Now, in a particularly kafkaesque twist, Quevedo is throwing people in jail for refusing to sign paperwork too!

The case of the two Chevron managers now facing treason charges has to stand as one of the most aberrant and self-destructive episodes of today’s Venezuela. The specifics are not clear, but Reuters’ Marianna Párraga and Alex Ulmer report that what brought on the charges isn’t what they did, but what they didn’t.

The two Chevron employees were jailed when they refused to sign a supply contract written by PDVSA executives under an emergency decree, which skips the competitive bidding process, according to a half dozen sources close to the case. Such decrees have been cited by Venezuela prosecutors as a means of extracting bribes in some recent PDVSA corruption cases.

Read between the lines, man: Chevron’s people are facing decades in jail for refusing to go along with corruption. As Stolk tweeted, in Venezuela not stealing is treason.

There’s a heavy dose of Undercook/Overcook, Parks & Rec black comedy here (sign the procurement deal, jail; don’t sign the procurement deal, jail right away), but the broader strategic aspect is, not to put too fine a point on it, simply baffling. PDVSA needs Chevron. I mean, PDVSA NEEEEEEEEEEDS Chevron. With the bottom falling out of its own production capacity, PDVSA has never had a weaker negotiating hand vis-à-vis its foreign partners.

It’s never a good time to bite the hand that feeds you, but this is a step beyond. This is chomping on the hand that feeds you when you’re emaciated, delirious from acute malnutrition, on the verge of quite literal starvation, then severing the hand, dousing it in gasoline, setting it on fire and shitting on the ashes. We’re in a space beyond corruption here, beyond ideological turpitude and moral abasement beyond garden variety self-harm into the realm of spiteful, sadomasochistic national self-immolation.

En serio.

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  1. As Quico comments, this is an example of the regime shooting itself in the foot. IIRC, the foreign operators are responsible for over 40% of Venezuelan production. CC had an article on that once.

  2. 1) PDVSA had around 40,000 employees when Stupigo was elected.

    2) Stupigo fired around half who weren’t politically loyal.

    3) PDVSA then had around 120,000 loyal employees prior to the recent exodus.

    4) PDVSA has been pumping 1/3 the barrels with 120,000 employees…than they did with 40,000 employees.

    Corruption in PDVSA?

    They should add it to their fucking logo.

  3. An important point in the Reuters story is that the employees “balked when the parts were listed at more than double their market price in a contract worth several million dollars”. That smells of a kickback situation; it would be interesting to know which firms were being designated as the lucky suppliers of the over-priced merchandise.

    • “…it would be interesting to know which firms were being designated as the lucky suppliers of the over-priced merchandise.” Interesting indeed.

      Reuters claims “half dozen sources close to the case” but does not name the contracts’ vendors.

  4. Wow Wow Wow this is with distance THE best article I have read EVER on CC. Díos Santos y María. Chapeau Francisco (y) (y) (y) Amazing.

  5. I can imagine Quevedo’s argument:

    “Our partners over at Rosneft don’t seem to have a problem with these kinds of contracts: what’s so special about you?”

  6. People, specially many outside the country, keep complaining about the docile nature of Venezuelans, that we don’t have the guts to do anything against the regime. But it is difficult to have balls when fighting a mafia like this. I honestly don’t know what we can/should do. Fear of death, or worse, fear of landing in a Venezuelan jail for years to come when you have a family to feed has made chickens of most of us. As it is, we already go through hell trying to just put food on the table.

    If anyone has a recommendation of we should do to get rid of these riminals, it’d be greatly appreciated.

    • Well, one guy tried to stir things up very publicly, and he got Swiss cheesed by Chavismo.

      My suggestion is trying the same thing… without all the publicity. Start Swiss cheesing Chavistas. One red shirt at a time.

      You will know when its working when the colectivos fear coming out of their barrios.

    • I agree with ElGuapo and have been saying for a long time that there has to be a point in time where mass killing of chavistas has to occur. Civil war will be The only way out of this dictatorship. By the looks of it VZ’a will have to endure this regime for many many more years to come. CubaZuela is firmly established and inside VZ there is NO united opposition what so ever!

      • The situation in the barracks is actually very ripe for a coup and the U.S. is promoting this. How so? The strategy involves pardoning the generals i.e. overlooking and looking the other way. This strategy increases the pressure on NMM to seek negotiated solution; one in which they keep their ill-gotten goods (with Washington’s approval). The strategy was unveiled days ago by Juan Cruz. Note the silence.

    • Charlie, yes I am one of them, that believed that Venezuelans are docile. In early 2017, I posted many times that the only solution I saw was protest, revolt, sabotage, and the spilling of blood for country. I could not understand why reading the CC, that this would not occur, but realized that those that comment here were mostly ex-pats. Being out of country, typing on the computer, sipping their morning coffee, reading the horrors that the in-country Venezuelans were enduring, it is easy to be enraged and call for “all means possible” to change the situation. Then in March, then April, I felt the tide was turning. Then the blood started to spill, and though there was no joy, I felt that, that blood would fuel more anger and resentment, and ultimately even if a 1,000 souls were lost, they would all be seen as hero’s of the New Venezuela. Actually, I believe, there will be that day, when this dictatorship is gone, and Maduros ashes are swept down the sewer, and a monument will be erected for those 163 souls.
      As you know in June, Rambo aka Oscar Perez, flew into the heart of Caracas with guns ablaze. I saw this as the proof, that the end was near, until I heard those guns were shooting blanks. Hard as it was, I tried to understand his reasoning, of showing the regime that many military men wished change, and is actions were intended to spark that military coup, but the passive blood-less blanks shot, instead was framed rightly so as a TV novela. All drama, edge of the seat watching, but “Brought to by Cerveza Polar”. If only he had dropped a few big ones on Miraflores, the pueblo would have seen it as an attempted coup, instead of framing him as either a kook or puppet.
      I have resigned myself, to believe that the true Venezuelan nature has been skillfully molded over the last 20 years into believing that MOTHER OIL (aka free money, gas, electric, health, houses, fridges, etc), are the natural right of the people. God blessed Venezuela, and “I a venezuelan” (I am not), and my children, and children’s children, will be taken care of forever. After all, oil is abundant and endless til kingdom come.
      It has been ingrained in the minds now of a majority of the population, and those who saw the fallacy, have fled and the remaining have become more cohesive, more strident in their beliefs.
      Today, I believe all is lost in the respect of intellectual change, as the politician lost all respect by joining in the sham elections of the CNA.
      As well, with this forfeiting of responsibility, over the last 2 very critical years, the regime, has learned many lessons and tactics, that I believe has very effectively shut down all dissent. Jailing of protesters, threatening their families, shutting down any remaining media, whether TV, print or Radio, and of course applying brilliantly fake news, and shoving down the throats of all, endless propaganda. Lastly the Patria de carnet is a stroke of genius.
      The only hope I see not is an economic implosion, which I believe will cause change.
      But, I fear now, with all that I have learned, that what remains, will still be a population that believes in the endless milk of the mothers tit.

    • “If anyone has a recommendation of we should do to get rid of these riminals, it’d be greatly appreciated.”

      You caught the tiger by the tail; letting go will require the spilling of a lot of blood.

  7. “balked when the parts were listed at more than double their market price in a contract worth several million dollars”.

    Someone sets up a kickback deal but it requires their partners (Chevron) approval. When they balk, Quevedo, like all Chavistas, can brook no checks and balances to his direct order, so balking is seen as insubordination and they go to jail. What this does do is show how the pie is shrinking down to scraps, and a few million dollars is nothing. But since Quevedo and his cronies are being done out of the little they can still siphon off, this cannot be tolerated.

    What’s most telling here is that the rule of law holds absolutely no sway over the Chavistas, who write their own laws as they go. And now it seems they make no effort to even conceal the details of an obviously crooked deal. That’s desperation right there. What’s coming to light here is the Chavista’s inability to force the few that are left in the oil industry to be complicit in crooked deals. And crooked deals are all that is left.
    What would be interesting would be a speculative economic breakdown of where the daily millions in oil revenue actually goes.

  8. The government of Venezuela is run by military men que se creen bien arrechos. All of their life they ordered and things happened, like “shine my boots private!”.

    Normally, this lording mentality is refined as officers reach Colonel and beyond where their duties become outward looking from the troops. They must deal with politicians, business people, world leaders. However, Chavismo is inward looking and shunned the western world, so the military leadership was groomed with backward countries like Cuba, and backward people like the Castros.

    So essentially the countries is run by a thug mentality that proclaims that Chavez was great. They are so clueless that they don’t even know that they don’t know, so it comes to this, ellos son tan arrechos that they think they will intimidate Chevron to do their will, because after all Venezuela tiene que jode petroleo and EVERYONE is dying for a piece of it… if they only knew.

  9. There is something fishy about the story, if Petropiar stockholding is 60% held by Pdvsa thats enough to have any recalcitrant expat fired from the company and replaced by other more pliant personnel ….., why go to the trouble and scandal of having them detained on grounds of ‘betrayal’. Are they perhaps trying to intimidate all expats now working in Pdvsa partnerships …….!!

    • Respect your many postings Bill.. but get facts straight before accusing as you did last week. These Chevron guys are not corrupted… and PDVSA holds 70% interest.

      The procurement process under bariven is complicated, slow and corrupt, therefore there are processes available where the IOC, with prior signature of pdvsa, can procure and import equipment and be repaid by the EM. And it works the other way. Usually there are “uplift”charges for accelerated delivery. In this case when it came time for Chevron to approve the bloated purchase orders the managers balked.. due to obvious excessive “uplift charges”..

      As written in previous comment IOC’s have removed expat management , and expat technical staff are taking vacation out of country. Quevedo is shooting pdvsa in the foot with a nuke.

    • As for more “pliant” employees.. no one wants to work in Venezuela.. it is seen as a career killer in a barren Mad Max world. and those there not only must follow Venezuelan law, but also IOC international standards, which are even more strict. Being pliant is not an option unless you want to get fired, destroy your career and possible jail time back home. Your accusation is not only shallow but baseless and ignorant.

      • I intially thought it was possible that some Chevron expats might have been caught in some shady deals , they are human beings and as such are not exempt from falling to tempation , it has happened before with reputable oil companies inside and outside Venezuela , it doesnt happen as often as in Venezeula and is normally detected and sanctioned but believe you me it does happen !!
        Then I learned that they were not being accused of corruption but of betraying the country because they refused to sign some purchase orders which did not follow the ordinary bidding protocoles , same as you I know that bidding procedures are sometimes sidelined when the purchase is to respond to an emergency in which case a surcharge is to be expected from the suppliers , but usually that would not stop a regular expat from authorizing a purchase order so their behaviour suggested that something else was preventing them from signing them , something far more sinister…….., the question is why should that bother managers who are on loan to a mixed capital company which is the recipient and owners of whatever is being ordered ….of course we are all familiar how inneficient the Pdvsa procurement system is and how it sometimes has to rely on the procurement being processed by the offshore partner , but then if the purchase is made by Chevron acting for and on instructions from the mixed company , the responsibility for any shady deal lies on whoever gives the instruction not on the party who is only acting as the agent of the other , so again something is missing in the information we have ….., so still something of a mistery of exactly whats making the expats reluctant to sign the purchase orders ……. Legally under Venezuelan law the party being told to do something unlawful has a second alternative to refusing to sign the to him unlawful purchase order and that is to sign it but leave a memo on record protesting the decison and stating that it considers it unlawful , legally then he is off the hook ….a more pliant expat might have done that if he believed there was some hankypanky going on with the purchase order ……..normally you are no guilty if you do something under duress and leave a record your protest …, dont know all the details of the case so any opinion I may express here is purely conjectural ……Now if there is a purchase order which the corporate authorities of the mixed company controlled by Pdvsa order made then its something done on a regular basis for a long time , are we to assumme then that this is the first time that a purchase order has been signed with an exagerated mark up , doenst sound likely , so why the ruckus now , might it have something to do with the sanctions regime ………?? thats why I puzzle about the possibility that this is the current Pdvsa management doing some exemplary intimidation of their offshore partners !!

        • A lot of words Bill… can you not just apologize? These guys are not corrupt.. they got caught in a corruption scheme and did not fold. That’s called intgrity, legal, honest, etc. The IOC’s are walking a tightrope regarding US sanctions. They of course want to maximize/optimize production.. but not at risk of breaking US laws and sanctions.

          Quevedo has nuclearized the EM for some other reason. Have no,idea how attaching a memo works, not sure where you pulled that from, because knowingly breaking the law in any country is illegal and leads to jail.. Expats are/have left country. This is going to be disastrous for production.. more misery and starvation to be followed by mass exodus. More falled state if possible.

          Please Bill, admit you are wrong rather than speculating some far fetched conspiracy..

        • The practice of “emergency” decrees have been used for decades (even before this government) to get juicy kickbacks out of inflated contracts, of course, this government mastered the art of avoiding licitaciones for maximizing stealing.

          If this was passed as an emergency order it was because PDVSA desired it to get to that point.

    • I would say that Chavismo is taking a page out of the IRS handbook.

      When John Q. Public gets audited by the IRS, nobody knows nor cares. When Mr. Public gets his assets frozen, and property seized, nobody knows or cares. His neighbors, friends, relatives… nobody.

      However… when Wayne Newton, or Willie Nelson, or Wesley Snipes gets a visit from the IRS… suddenly, the cameras are all over the place. Ever wonder why ANYONE ever remembers the boxes of stuff being hauled out of Willie’s house? The furniture being seized from Wayne Newton? Wesley Snipes in cuffs? Who called the news crew? Hmm?

      The IRS can’t pay for this kind of publicity. People think, “OH MY GOD! If this can happen to people like Wayne/Willie/Wesley, with all the money he has for accountants and lawyers… They can do it to me!” And suddenly, people are rue to itemize what the law allows them to because they FEAR Big Brother. Its all about revenue…

      This is all high theater. Chavismo is making a statement. “Fear us!”

      Though in all honesty, they won’t be feared for long. Soon they will be the ones running from the hangman.

  10. “The case of the two Chevron managers now facing treason charges has to stand as one of the most aberrant and self-destructive episodes of today’s Venezuela”.

    Gotta love it. Worst crime anyone can commit nowadays in Kleptozuela? Impede Corruption. Intercede in the Fabulous Mega-Sancocho Chavista Guiso Machinery. “Te metes ahi, y vas preso!” Hilarious.

    “We’re in a space beyond corruption here, beyond ideological turpitude and moral abasement beyond garden variety self-harm into the realm of spiteful, sadomasochistic national self-immolation.”

    This is what Quico and many others do not comprehend. PDVSA now stands as a SECONDARY money making Scam, alternative Mega-Guiso Caserolle, if you will. The new and much improve Galactive Drug Trade on Steroids makes way more Cash money for the Chavista Thugs. And it’s much, much easier money to make, and to hide, and to launder. Twice as interesting as the technically difficult Oil business, where you have to plan, do maintenance and actually Work. Plus hide the money afterwards, not as easily as with drugs proceeds.

    As of today no one knows, but I venture to guesstimate that the Drug Trade brings way more CASH to steal – net profits – than the carcass of that Oil industry. Plus it’s mortgaged in big part to China and Russia: only the USA and India pay CIA, Cash in Advance (as drug dealers sometimes do), but only about $55 Million per day. The rest is China’s and Russia’s oil. No profit. Not evn with dubious bonds, (unless you deal with the crooks at Goldman Sachs and get kickbacks when/if you repay.)

    Therefore, PDVSA is only interesting IF there are major Guisos straight up from the start of the supply chain: Procurement. Sourcing without bids or RFQ’s. That’s Cash por el pecho with one prearranged supplier. Paid with gold, apartments in the Caribbean or Eastern Europe, Iran.. who knows. Or cash.

    Therefor it ain’t “suicide” or “biting the hand that feeds you”, when they punish a few Chevron straight shooters. They are just making sure everyone else allows the corruption and the kickbacks OR the deal isn’t worth it at all. Because Drugs are better, in that case.

  11. I and others have disagreed with Quico from time to time but his writing skills, in my view, are excellent. You tell a great story. Congrats Quico.

  12. “Venezuelan authorities have yet to comment on the arrest of the men, both Venezuelans, and no charges against them have been made public.”

    That’s from Reuters, so the two arrested are not ex-pat Americans but locals. Although Poeta overstates his case IMO, I believe he’s spot on in his evaluation of the military goons and their involvement in oil sector shenanigans. Quico and others must assume that the aim of PDVSA is structural survival, so orders that look daft to us and gauged as unintentionally destructive to the old sector, but I’d wager that whoever is running PDVSA right now is mainly if not entirely into for the bilking and skimming and fuck PDVSA and Venezuela.

    There is no PDVSA as an institution. There are only the military and a rapidly crashing bunch of extraction operations and failing refineries. The remaining staff has been put in an impossible position so expect more to quit. But nobody quits working for a foreign company like Chevron, and that’s the rub. The Chavista’s DO need Chevron, but unless they start signing off on the looting and kick backs, I expect Chevron itself will be the next target.

  13. Gringo Dos. I agree it will be disasterous. When the mafia sacks a business, they just move on to the next one. But there is no next one for the Chavistas. And if the 50 million a day (is that figure correct??) in petro earnings get crimped or shut down after the snap elections, to thugs can only shift to drugs and minerals and those are desperate times for certain. That’s right there with the worst African Nation melt downs. We all scoff at intervention but if it goes that way I don’t see the rest of the Americas going with that.

    The only thing I’m not guessing about here is that things are sure to get worse. The stories I’m hearing from CCS are horrific. There’s still a bubble in most places where people with money can hunker down in quasi civilization, but the pueblo is close to a jungle in many places. And to think of someone saw this coming back in, what, the 30s? The whole “Devil’s Excrement” warning.

  14. “Now, in a particularly kafkaesque twist,” “The Trail” is good introduction to what’s happening in Venezuela today. I agree with Charlie and ElGuapo (above). Plus there too many people on this planet.

  15. Spot on, Quico – It’s difficult to imagine what better allies the Venezuelan opposition have than the lunatics running PDVSA. What with their skill in manufacturing economic mayhem and catastrophe far in excess of what the most radical opposition action or brutal international sanctions could ever hope to achieve.

    It seems barely a week goes by where there isn’t a report detailing collapsing production, a ruinous debt default, stupendous corruption, or some piece of critical infrastructure exploding in a ball of sparks and fire. And the only thing keeping the numbers up were the joint ventures, which Quevedo just hit with the judicial equivalent of a WMD. Bad mistake! Just notched my probability estimate of Maduro falling in the next year up to 40%. (The odds on a return to democracy are much lower though..)

    • Naky/Javier reported a week or so ago that the last official sale of foreign currency was only half a million dollars, (if I remember correctly) how can a country survive on that? Clearly it can not, how much is just flushed down the toilet on CLAP, fuel subsidies and price controls? Well at least inflation does not exist and is a creation of dolartoday et al. Comforting for the people and all that the newly created bonuses Maburro celebrates, everyone is a millionaire.

  16. In Orwell’s 1984, the INGSOC (English socialist party) had the slogan “War is Peace. Freedom Is Slavery. Ignorance is Strength.” Now the PSUV has added one to that: “War is Peace. Freedom Is Slavery. Ignorance is Strength. Corruption is Uprightness.”

      • According to the Merriam-Webster dictionary:

        Definition of upright
        1 a : perpendicular, vertical
        b : erect in carriage or posture
        c : having the main axis or a main part perpendicular; upright freezer

        2 : marked by strong moral rectitude; an upright citizen

        — uprightly adverb
        uprightness noun

        So, while I also like your alternative, I don’t see why mine is wrong.

        • Of course its not wrong but every language or dialect has a melodic line which speakers follow unthinkingly and which renders it fluent and easy to the ear so that when its broken its like what happens when a wrong note is struck in the interpretation of a musical melody , uprighteousness may have the same meaning as righteousness , but its sound is jarring to the ear …..this is what often allows you to know when someone is not a native speaker, they build their phrases in a gramatically correct manner but still the phrase sounds forced and artificial , they ve broken with the melodic line that the language or dialect favours…….!!

  17. Chevron and the other j.v. partners decided to do business with known hard-core marxixts. What did they think would happen?


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