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Blogger: Graft Doubled Cost Of Venezuelan Drill Rig

A Venezuelan blogger who now lives in the U.S. has apparently uncovered graft of $700 million on a single contract by state-owned oil giant Petróleos de Venezuela S.A. (PdVSA).

Gustavo Coronel published his findings Wednesday.

Foreign Policy described him as ‘a geologist who once worked for PdVSA long before the Chávez era [and who now] specializes in reading PdVSA’s annual reports for signs of corruption.’

In 2010, the offshore drilling rig Aban Pearl sank in Venezuelan territorial waters. It was owned by Aban Offshore Co., a company based in India. It had been rented in 2008 for five years by PdVSA.

Rental was through a Singapore-based company incorporated in Panama called Petro Marine Energy Services LTD, formed in 2008 shortly before the rental agreement was signed. Aban Offshore said it received a rental fee of $358,000 a day. However, Petroleos de Venezuela said in its annual report for 2008 that the value of the contract for the five-year period amounted to $1.3 billion, or $730,000 per day.

By searching public records in Singapore, Coronel found that among the directors of Petro Marine Energy Services LTD was a resident of Venezuela.

Based on his research, he said:

Therefore, five things now appear to be factual: One, that the barge was contracted by PdVSA to an intermediary company, not to its owner. This is, in the best of cases, inefficient and a potential cause of corruption. Second, that the barge was contracted to the intermediary company by an amount of money that seems to be twice as large as that paid to the owner, suggesting that a considerable amount of money remained in the pockets of this intermediary company. Three, that the intermediary company formed in Singapore and owned by a Panamanian registered company was incorporated solely for the purposes of this transaction and received the contract from PdVSA without bidding. Four, that the Panamanian company owning the Singapore intermediary company has a capital of only $10,000, totally insufficient to be responsible for a $1.3 billion contract. Five, that the owners of the company contracting with PdVSA were established contractors of PdVSA in Venezuela.

Foreign Policy asked Coronel about the official government reaction to his invesigation. He replied: ‘In a single word: Nothing.’

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