Chávez-Correa pact

Contradicting the official stance, the transnational oil companies ran away with a good slice of the agreements between Ecuador and Venezuela. More than half of the 27.5 million barrels of diesel, naphtha, and other fuels that state-run oil firm Pdvsa sent to Ecuador between 2009 and 2011 were previously bought in the international market.

Ecuador and Venezuela have recently extended their oil agreement. Shortly after Rafael Correa became president in 2007, Pdvsa began to process Ecuadorian crude oil in exchange for other derivatives. The pact was intended to put an end to intermediaries. However, in this history, transnationals have also eaten from the 21st century socialism.

According to the invoices that Pdvsa submitted to Quito since 2008, 53% of shipments sent to Ecuador were purchased in third countries. Of those, 39% were bought directly from intermediaries, which were the reason why presidents Hugo Chávez and Rafael Correa reached the Crude Oil for Derivatives Exchange Agreement that has been in force between the two governments for over five years.

Against resellers

It has been a while since Correa declared war against oil traders. Certain that they take advantage of the people's wealth, he declared upon taking office that he marked the end of the long neo-liberal era that Ecuador had been living under.

And to destroy all doubts, on January 16th, 2007, his first day as president, Correa stood next to President Hugo Chávez while signing the agreement that offered Venezuela 100,000 daily barrels of crude oil for Pdvsa refineries in exchange for the equivalent in gasoline and other fuels needed to meet the domestic demands of his country.

Chávez and Correa shook hands that day. They went out to the Carondelet presidential palace balcony, downtown Quito, greeted the masses celebrating the new government, and, in the same way, agreed to put an end to oil resellers. At least on their side of the world.

Five years later, the corollary of this story shows that Pdvsa resorted to other private companies to meet the ally's demand. Almost 14.7 million of the 27.5 million barrels that the Venezuelan government sent to Ecuadorian ports never came from Pdvsa refineries. This was a series of shipments valued at almost USD 947 million that consisted of commissions and percentages for the same corporations that originally gave rise to the alliance between Caracas and Quito.

The search for naphtha in Latvia

This is not the first time that doubts have arisen over the agreements between the two countries. The Ecuadorian press has warned that the transnationals also participated in Chávez-Correa pact. Nowadays, these warnings do not consist of unofficial declarations leaked by third parties. Through bills and the confidential records of the agreements Pdvsa submitted to Quito from 2008 to last year, it is clear now that there is space for large transnational corporations in the Bolivarian Revolution of Venezuela and the Citizens' Revolution of Ecuador.

In order to supply the Ecuadorian market with 263,500 barrels of catalytic naphtha, in 2009 Pdvsa had to import a shipment worth USD 25.6 million from Saudi Arabia. Invoice number 522071-1 indicates that on June 14th of that year, Pdvsa resorted to ExxonMobil, which had already filed a number of arbitration claims in international courts against Pdvsa, to send the cargo from Yanbu, the largest port on the Red Sea, to La Libertad port, on the Ecuadorian Pacific coast.

The Saudi Arabia example is in no way a unique one: between 2009 and 2011, Pdvsa sent naphtha and diesel to Ecuador from coordinates so distant that they ranged from the United States and Canada to Belgium, the Netherlands, France, Italy, the United Kingdom, and Latvia.

Pdvsa has been resorting to the fuel market in Saudi Arabia since the late 1980's. Central University of Venezuela professor of Oil Economy, Rafael Quiroz, warns that back then Pdvsa bought supplies for Venezuela-owned refineries in Germany. Quiroz adds that this is the first time that records are kept of shipments purchased in the other side of the world to send them to places like Ecuador.

Ramírez is satisfied

This is a triangulation, said Minister of Petroleum and Mining Rafael Ramírez this past April 17h, weeks before he would welcome his Ecuadorian counterpart in Venezuela to renew the agreement between Quito and Caracas that has been in place for more than five years. "We take their crude oil, we add value to it, we sell it, and then we look for the products that they need, at the quality they demand it."

At a press conference, while presenting Pdvsa's latest financial statement, Ramírez gave a positive outlook on Pdvsa's partnership with Petroecuador. "By the time the agreement came into force, Ecuador was being subjected by the traders, who paid them very little for their crude Napo and charged them high prices for products," Ramírez pointed out. "This has since improved greatly for them. We have helped them, they have strengthened their capacities, and we are exchanging close to 60,000 barrels a day."

What Ramírez did not point out at that press conference or any other time is that in order to stay true to the deal, Venezuela has had to resort to the same traders that they tried so hard to avoid in Ecuador. And this does not mean just any transnational company, but giants like Glencore and Trafigura, who Correa himself came to call -in one of his speeches-"mafia groups."

The change came in 2009

The first shipments that the Venezuelan government sent to Ecuadorian ports in 2008 came from Amuay, Punta Cardón, northwestern Falcón state, and other facilities that Pdvsa owns in Curacao. Except for a few isolated cases, during that year the deal worked just like Chávez and Correa dreamed it would.

But in 2009, something changed. Just after the OPEC's production cuts, expropriations in the oil sector, and a drop in oil GDP, less oil ships departed from Venezuelan refineries for Ecuador. Pdvsa started buying derivatives from other state oil companies such as Petrobás and Petrochina, but most of all from private companies. In fact, almost 80% of external purchases were traced to Glencore and Trafigura, the two giants of raw materials.

jpoliszuk@eluniversal.com

Translated by Alejandro Osio