VENEZUELA - Petroleos de Venezuela will cover losses suffered by the company's pension fund when it invested in an alleged Ponzi scheme in the US, Oil Minister Rafael Ramirez said.
PDVSA, as the state oil company is known, is not responsible for the losses because the operator of the Stamford, Connecticut-based hedge who committed the fraud wasn't an employee, Ramirez said in an interview on the Televen television network. Ramirez did not say how much was lost in the scheme, or how much money the pension fund had invested.
Francisco Illarramendi, the majority owner of a holding company through which he managed several hedge funds, pleaded guilty to fraud in the US on March 7 after investigators from the Securities and Exchange Commission uncovered what prosecutors said was a Ponzi scheme with potential investor and creditor losses of hundreds of millions of dollars.
"We have decided to back the workers, we will take on the problem, guarantee income, the retirement packages and above all the pensions of the workers," Ramirez said. Illarramendi "has no relation with PDVSA".
Ramirez said Illarramendi's fund had also received investments from other Venezuelans, such as the Cisneros and Capriles families, two of the country's richest families.
Ramirez also said that U.S. oil companies Exxon Mobil Corp. and ConocoPhilips, which in 2007 filed international arbitration claims against PDVSA related to asset seizures, are asking for "exorbitant" levels of compensation. The oil producers will be paid "corresponding to their investments," he said.
Investments in Venezuela's heavy crude Orinoco Belt will allow PDVSA to increase production capacity to 3.5 million barrels of oil per day by 2012 and to between 4.5 million and 5 million barrels per day by 2014, Ramirez said. The company currently produces 3.11 million barrels per day, not 2.7 million barrels per day as the Organization of Petroleum Exporting Countries claims, he said.
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