Venezuela holds Citgo execs in scheme

CARACAS, Venezuela — Venezuelan authorities detained the acting president of Citgo Petroleum Corp., the state-owned oil company’s U.S. subsidiary, and five other executives suspected of involvement in a corruption scheme, officials said Tuesday.

Jose Pereira and five Citgo vice presidents have been detained on suspicion of embezzlement stemming from a $4 billion agreement to refinance company bonds, chief prosecutor Tarek William Saab said.

Saab said the deal provided “unconscionable and unfavorable” terms for state oil giant Petroleos de Venezuela SA and offered Citgo itself as a guarantee on repayment without prior government approval. Mediators of the contract were purportedly eligible for a 1.5 percent payoff of the total.

Saab described the Citgo executives as “putting at risk Citgo’s assets while obtaining personal benefits.”

The detentions are part of an investigation by Venezuelan authorities into the country’s oil sector, which has struggled in recent years amid mismanagement and declining production.

Citgo runs three refineries in Illinois, Texas and Louisiana.

Officials at Houston-based Citgo distanced themselves from the arrests, saying in a statement that the firm operates independently and meets the standards and regulations set by the United States.