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Crime Mapper: Citgo & questionable affiliations

Updated: Aug 22, 2021

The new USA administration decided to curtail this countries ability to produce its own oil and that we should be dependent on some very bad affiliations to both bankroll them and allow them to control our dependence on energy. Here is one story of investigative reporting just who we get our oil from.....


MONDAY, AUGUST 9, 2021

While world oil companies make forecasts with Trafigura, CITGO continues negotiating with the questioned company Despite multiple complaints and investigations of corruption, PDVSA's US subsidiary, as reported by reports, maintains the marketer as its main supplier. By Maibort Petit Suspicious due to the multiple complaints made against it for the alleged commission of irregular acts, shady negotiations, imposition of surcharges and others, the multinational commodity trading company Trafigura Group Pte. Ltd. is in the crosshairs of many companies, agents and nations that, foresight, have decided to suspend or limit negotiations with it, pending the outcome of the investigations it is the subject of. Many, but not all, because companies such as CITGO Petroleum Corporation, the subsidiary of Petróleos de Venezuela SA in the United States, continue to maintain it as its main supplier of crude oil and derived products.


Trafigura being investigated for corruption
Trafigura is being investigated for corruption

It is far from the real intention of CITGO's senior management to make decisions such as the one recently implemented by Petróleos Mexicanos (Pemex), which temporarily prohibited the establishment of new contracts with Trafigura AG, until the facts and inquiries surrounding it are clarified. to the marketer are carried out in several countries, yield results. This is a revelation made by Reuters [1], which indicated that Pemex and other state oil companies are now more cautious when negotiating trading firms such as Trafigura and Vitol.


Venezuela Politica had already warned about it, when in a note published on these pages in February 2020, it reported that since 2019, CITGO had increased the purchase of crude oil in the spot market, with some trading companies linked to Chavismo. We refer at that time, that companies allegedly involved in corruption schemes, such as Trafigura, Lukoil, Vitol and Mercuria, among others, had been benefited with direct purchase contracts



But when it comes to Trafigura, reports reveal that Trafigura Canada GP's purchases increased significantly in 2019, as well as indicating that the Swiss company became - after PDVSA Petróleos, which led as a supplier before OFAC sanctions. - in the largest supplier of crude oil in the trading area during the periods 2017 and 2018. Sources from Venezuela Politics indicate that trading contracts with these companies, far from being banned, increased during the management of the board appointed by Juan Guaidó in the subsidiary


Companies such as Trafigura, Vitol, Glencore and Mercuria joined CITGO's larger registry of suppliers and clients during the administrations of Hugo Chávez and Nicolás Maduro. In the management of Gustavo Velásquez and Rick Esser, the intermediary trading companies acquired a great role, a role that they did not cease to have, as everything shows, when the PDVSA subsidiary in the United States came under the control of the ' Guaidó's interim government.


Given these complaints, the CEO of CITGO, Carlos Jordá, would have ordered some audits and had tried to investigate and learn about the operations of the subsidiary's trading area without having been successful in this attempt. Sources from the oil company referred to Venezuela Politics that, inexplicably, the company's audit area excluded from the company's annual plan, all the audits of that branch of the subsidiary.


But our sources also warned that Carlos Jordá's initiatives regarding the trading area, the contracts with Trafigura and the rest of the companies questioned, are far from responding to the desire to make CITGO's operations transparent, but that it is simply the consequence, his reaction, to the complaints, both from these pages made, and by other voices that accuse the irregular conduct of the Swiss marketer.


The eye that the United States Department of Justice has on the PDVSA subsidiary is not without weight, hence Jordá's apparent desire to investigate and clarify the situation in CITGO's trading area.


The alarms about Trafigura led PMI Comercio International - a subsidiary of Petróleos Mexicanos - to suspend the signing of new contracts with the trading company and its subsidiaries at the beginning of July, according to a document that Reuters had access to, although it warns that in the same there is no reference to the reason for the ban. Of course, the Mexican oil company will respect the current agreements.


The news agency note indicates that, although Pemex with these decisions seeks not to expose itself with these companies investigated for corruption, its units in other places, such as Geneva, for example, continue to negotiate with Trafigura.


Among those investigating this global commodity trader for alleged acts of corruption and manipulation of the oil market is the United States government, which, through organizations such as the Commodity and Futures Trade Commission (CFTC), which inquires about the scope of Trafigura's activities, especially in its operations with South America.


The investigation is understood to relate to Trafigura's oil trading division, which is based in Singapore but also has offices in London and Geneva [2].


Likewise, in 2018, Vitol, Trafigura and Glencore were linked to the corruption of the Brazilian Petrobras, when they were accused of paying bribes in the order of USD 31 million to state officials, all in the context of the Lava Jato operation. [3 ].


REFERENCES

[1] Reuters. EXCLUSIVE Pemex's trading arm bans new business with Trafigura -sources. July 15, 2021. https://www.reuters.com/business/energy/exclusive-pemexs-trading-arm-bans-new-business-with-trafigura-sources-2021-07-15/

[2] The Guardian. "Trafigura investigated for alleged corruption, market manipulation." May 31, 2020. https://www.theguardian.com/world/2020/may/31/trafigura-investigated-for-alleged-corruption-market-manipulation

[3] Expansion. "Vitol, Trafigura and Glencore, accused of alleged corruption linked to Petrobras." December 5, 2018. https://expansion.mx/empresas/2018/12/05/vitol-trafigura-y-glencore-senaladas-de-presunta-corrupcion-ligada-a-petrobras





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