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Derwick Oil & Gas: PDVSA's new agent

Back in September 2013, in the course of doing research and reaching out to contacts for a post on Luis Oberto, I got an email from a source saying that Oberto and Francisco Convit had bought an oil well for $45 million in Zulia. Francisco Convit is one of Derwick Associates execs (yes the Derwick Associates meant to be a "leading" company in contracting, procurement and installation of power plants). Through further research I found that Convit was in fact a director in something called Derwick Oil & Gas, incorporated in Barbados in 2011.

So Derwick Associates shares execs/directors with Derwick Oil & Gas, and a source informed that Luis Oberto and Francisco Convit had gone into some kind of partnership in an oil well. I searched and asked, but could not find any corroboration that could prove information leaked, beyond Barbados' registry details. There was always the possibility of Derwick going into oil. Its procurement of power plants to Venezuela came after a Letter of Intent was signed on 30 September 2009 with BARIVEN, a PDVSA subsidiary, in which equipment and installed capacity was described down to the last megawatt.

It was only natural (a foot in the door case) for Derwick to “expand”, or “diversify” into oil, after exhausting all possible overpriced deals related to power plants and scheming billions in the process. Given the sort of relationship it had developed with BARIVEN/PDVSA, and the manner in which it was contracted, i.e. BARIVEN/PDVSA agreed to submit to Derwick's consideration publication of any detail pertaining expenditure of hundreds of millions of dollars of public funds, Derwick's venture into oil was to be expected. In addition, it could claim with some degree of credibility “expertise” in oil-related matters, as Edgard Romero Lazo (Derwick's Operations Manager) was a PDVSA contractor in Zulia, and even did a stint with Odebrecht, hence the correct corrupt pedigree.

In the absence of evidence, or a leaked contract, what I had was inconclusive. But then, a source in Madrid mentioned that the Derwick boys were boasting, in social gatherings, about an exciting “new venture”, intimating that it was energy related, but separate from its power plants business. A separate source relied that Maersk Drilling Venezuela was to be sold to a group of “Venezuelan investors”. Maersk Drilling Venezuela operates for PDVSA a number of barges in Maracaibo Lake on management contracts. Having found a clear statement from Maersk about its willingness to divest its operations in Venezuela, I asked them about it, and they confirmed that indeed they were looking to sell (perhaps due to a multimillion-dollar debt owed by PDVSA):

Could Derwick be that group of “Venezuelan investors”? But this information surfaced after that email I got in September last year, and Maersk has not closed any deals yet on its Venezuelan barges.

But in the last couple of weeks, two leaks put the issue to rest. The first had to do with Derwick Oil & Gas offering, like right now, oil and gas to Morgan Stanley. I consulted some sources and found out that former U.S. Ambassador to the Dominican Republic, Hans Hertell, has been doing Derwick's bidding in certain quarters for a while. Hertell, who has his own dirty little secrets from his oddly long time as Ambassador in DR, claimed that Derwick Oil & Gas was in a position to sell 75,000 barrels per day. That, at today's prices, is about $2.7 billion / year worth.

Hertell's claim sent me searching for an official announcement from PDVSA, of having granted Derwick Oil & Gas the right to openly market Venezuelan oil, not PDVSA's, its own. These things ought to be public, according to current Constitution and Law of Hidrocarbons in Venezuela. Furthermore, companies willing to sell Venezuelan oil and related products in international markets ought to register with PDVSA, or ought to enter into some kind of partnership with the Venezuelan oil giant. Alas there is nothing, not a single release, mention or official statement about this in PDVSA latest report. Most probably, as with all Derwick contracts with Venezuelan institutions in the past, there must be some clause, on some private agreement between PDVSA and Derwick Oil & Gas, that forbids either party to reveal any detail about their arrangement. Laws be damned.

The second leak was more revealing. As it turns, Derwick people also visited BTG Pactual, Brazil's largest investment bank. Pactual, let us not forget, acquired for $1.53 billion 50% of Petrobras African unit. So they could have a similar interest in Venezuela. Well, these time round Derwick people weren't flogging oil and gas, but oil concessions in Venezuela. Derwick's offer to potential investors is to form 50-50 “mixed enterprises”, claiming that in addition to capital investment their added value is that, as PDVSA agents of sorts, they can get things approved in Venezuela without problems. Just how on earth can Derwick be offering oil concessions in Venezuela to an investment bank? Is PDVSA outsourcing its international investment strategy to ramp up production to the likes of Derwick now? And what sort of deal with PDVSA has Derwick got that allows offerings of partnerships to players outside the country?

So now there's a leak from September 2013, claiming that one of the directors of Derwick Oil & Gas bought an oil well, reinforced by gossip from Madrid in the first quarter of 2014, confirmed by offers of oil and gas to Morgan Stanley, and offers of oil concessions to BTG Pactual. This is more than just coincidence, I think.

Now all the gossip sort of makes sense. There's this journalist in Spain, called Marta Gonzalez. She blogs for Hola, the Spanish church of gossip. She was married to Miguel Palomo Danko, son of Palomo Linares, famous matador. Linares started dating Lilia Lopez, mother of Alejandro Betancourt (Derwick's CEO). Lopez has a daughter, Lilia Jimena, who just happens to have fallen for Linares' son. That is, Linares and Lopez are a couple (some say the relationship caused Linares' divorce), and Linares' son and Lopez' daughter are also a couple (some say the relationship caused Palomo Danko's divorce). But the important thing here, is that Gonzalez was forced to sign a confidentiality agreement with former husband in order to get divorced. Gonzalez is forbidden to talk or reveal anything about Alejandro Betancourt's (read Derwick's) businesses.

Readers may get lost in all this, but Gonzalez' former husband (Miguel Palomo Danko) was the broker who managed the purchase by Derwick of that 1,300-hectare hunting estate in Toledo, near Madrid. It is in that estate that all manner of parties with friends and potential business associates are being organized. It is in that estate that deals with Rafael Ramirez (PDVSA's CEO) could have been sealed, and it was a Madrid source the first one that provided some gossipy corroboration to the email I got last September, as per Derwick's involvement in oil.

Followers of Venezuelan corruption will remember the last time a Derwick-like shell company, without track record, tried to sale oil involving a rather infamous Republican and how the whole thing ended (Free Market Petroleum and Jack Kemp). More recently, the marriage of convenience between Al Cardenas and Derwick ended up costing former ACU's boss much more than what he cares to admit.

Hopefully, when the RICO lawsuit against Derwick pending in the U.S. finally reaches its days in court, we shall see the sheer magnitude of Derwick's corruption. If that day does arrive, David Osio, for one, will not be able to enjoy those beautiful sunsets perched in his Millennium Tower pad, nor will he be able to launder any more Derwick money with his neighbour from the 60th floor...