Venezuela's Secret Plot to Sell Banned Syrian Oil in US Market

(Bloomberg) -- Syria and Venezuela plotted in recent years to evade international sanctions on Syria through a secret deal to transport its crude oil through Russia to the Caribbean.

The previously undisclosed plan aimed to sell Syrian oil at a big discount to Venezuela through a Russian shell company, which would send it to Aruba for refining and distribution to gas stations in the U.S. and elsewhere, according to dozens of emails, documents and interviews.

The scheme, which hasn’t been executed, indicates the extent to which the two pariah nations are willing to go to evade international rules and antagonize global powers. President Bashar al-Assad of Syria, written off repeatedly during the past six years as hundreds of thousands of his citizens have been killed in a brutal civil war, has clung firmly to power. 

For Venezuela, the plan forms part of an international agenda initiated by the late socialist President Hugo Chavez that has made the country an ally of Iran and Cuba. Now under the leadership of his embattled disciple, Nicolas Maduro, Venezuela is desperate for cash after years of government mismanagement drove oil output to a three-decade low, plunged the economy into a depression and fueled weeks of deadly nationwide protests. The Syrian initiative underscores Venezuela’s international ambitions, indicating that its current crisis could have repercussions far beyond its shores.

Caribbean Scheme

It’s unclear whether the plan is still under consideration. A key player, Wilmer Ruperti, a Venezuelan oil trader who grew enormously wealthy through his closeness to the country’s leadership, acknowledged in a phone interview his participation but said he no longer has a role in it. Syrian officials approached him in early 2012 during a party at the Syrian Club of Caracas.

At that time, Ruperti began renting a lavish guesthouse on Aruba’s northern coast to scout out a refinery and meet a local realtor, Oscar Helmeyer. He had his eye on a facility that had just been shut down by its owners, San Antonio-based Valero Energy Corp., causing massive unemployment on the island. Ruperti offered to pay Helmeyer $15 million for help in buying the refinery, one of the world’s largest, although in the end Venezuela’s state oil company leased it. In an interview, Helmeyer said Ruperti also met with Aruban Prime Minister Mike Eman and another top official, Mike de Meza. Both declined repeated requests for interviews.

In a September 2012 letter to Syria’s then-ambassador to Venezuela, Ghassan Abbas, Ruperti said the point of the scheme would be to “avoid the boycott that has been implemented by United States of America and the European Community.”

Socialist Fatherland

He proposed heading a business group called “Sirius Venezuelan” and recommended a five-year contract to supply 50,000 to 200,000 barrels a day of Syrian crude, as well as storage capacity for another 6 million Syrian barrels. Stamped beneath Ruperti’s signature, in bold italics: “Socialist fatherland, we will win and we will live.”

What followed was a chain of communication between Syrian and Venezuelan officials that included several executives of Houston-based Citgo Petroleum Corp., the U.S. subsidiary of PDVSA, or Petroleos de Venezuela, according to two people familiar with the talks. One note from Ambassador Abbas urged a Venezuelan official to come to Damascus to discuss volumes, terms and conditions of the deal.

In the phone interview from Caracas, Ruperti said the oil deal wasn’t meant to make a political statement. “It was a logistical solution to make a lot of money,” he said.

PDVSA did not respond to requests for comment. A Citgo official said the company “is not considering and will not consider Syrian crude imports to supply the Citgo Aruba Refinery. The company is committed to the operation of the Citgo Aruba Refinery in compliance with all applicable laws, and this includes all U.S. sanctions laws.”

Abbas couldn’t be reached for comment.

Trump Conflict?

Citgo attracted attention in Washington earlier this year by donating $500,000 to the inauguration fund of President Donald Trump, a sum that exceeded gifts by Shell, Walmart and most other U.S. companies. The donation raises concerns about how a foreign government might seek to buy influence inside the Oval Office, according to Richard Painter, who served as White House ethics counsel under President George W. Bush and has been critical of the Trump administration.

Citgo’s inauguration gift surfaced after a bipartisan group of U.S. senators said that “critical energy infrastructure” in the U.S. owned by Citgo could come into the hands of Russian oil giant Rosneft PJSC.


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Adam West  |  June 05, 2017
What, the guy went up to the girls and asked their nationality? Really?


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