Venezuela arrested two Chevron Corp. (NYSE: CVX) executives, the U.S. oil major said on April 17, in what appeared to be the first arrests of a foreign oil company’s direct employees during a purge of alleged graft in the OPEC nation.
Venezuelan intelligence agents arrested the two Venezuelan employees, who worked for the Petropiar joint venture, in the coastal city of Puerto La Cruz on April 16 for alleged wrongdoing, two sources in the oil industry told Reuters.
One of the detainees, Carlos Luis Algarra, is a refining expert whom Chevron had drafted in from its Argentina operations, a third source said.
Chevron confirmed the arrests in an email to Reuters.
“Chevron Global Technology Services Company is aware that two of its Venezuelan-based employees have been arrested by local authorities on April 16, 2018,” the company said.
“We have contacted the local authorities to understand the basis of the detention and to ensure the safety and wellbeing of these employees. Our legal team is evaluating the situation and working towards the timely release of these employees.”
Chevron declined to provide further details. Venezuela’s Information Ministry did not respond to a request for comment.
The arrests highlight the risks for foreign companies still operating in Venezuela, home to the world’s biggest crude reserves, but also plagued with crime, alleged corruption, and a new military management of its oil industry.
“This is unprecedented behavior for ‘Chavismo’ which until now had steered clear of pursuing or even speaking ill of top players in the oil industry,” Raul Gallegos, an analyst with the consultancy Control Risks, said in reference to the ruling ‘Chavismo’ movement founded by late leftist leader Hugo Chavez.
Chavez’s successor, Nicolas Maduro, since last year has overseen a major crackdown on alleged graft in Venezuela—with dozens of oil executives, including the former oil minister and president of state oil company PDVSA—now behind bars.
The purge comes years after industry analysts began criticizing PDVSA management for widespread graft. A report by the opposition-led congress said at least $11 billion went “missing” at PDVSA between 2004 and 2014.
For years, the government decried such accusations as “smear campaigns.” But Maduro later changed his tone and now blames “thieves” for widespread graft in the oil sector and an economic crisis that has spawned malnutrition, disease and emigration.
Vowing a cleanup, Maduro replaced many of the jailed executives with soldiers. But the major general now in charge has quickly alienated PDVSA’s rank-and-file, spurring thousands of resignations that further threaten the ailing industry.
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