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World

An oil deal that went too far in Venezuela

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Opening sequence

World

An oil deal that went too far in Venezuela

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COMING UP:An oil deal that went too far in Venezuela

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Transcript

00:00:01
>> Even for Venezuela's notoriously opaque oil industry, the case we've been reporting on for the last few months is highly controversial. My name is Alexandra Ulmer, and I've reported on this story from Caracas, Venezuela.>> And my name is Ganesh Gupta, and I reported from Bogotá, in Colombia.
00:00:16
>> So last August, Venezuela's state oil company, known as PDVSA issued a major tender to build oil wells. The plan was that this project would help boost Venezuela’s oil production and also help stem a raging economic crisis. Situation has gotten so bad here in Venezuela that mobs are looting supermarkets and rioting for food nearly every day.
00:00:38
>> Despite all that was at stake, the deal was won by a tiny Colombian trucking and trading company called Trenaco. Now Trenaco had never built a well in its life, yet its new boss, Alex Saab, was known to be close to the government of President Nicolas Maduro and his predecessor, Hugo Chavez.
00:00:55
Saab says he has nothing at all to do with Trenaco, but we spoke to Trenaco executives in Columbia who said that he did. They said that he and they were flying back and forth from Bogata to Caracas every single week, six months before the tender was even published.
00:01:11
They were hiring staff, buying equipment and meeting with top PDVSA executives. They knew that they would win.>> Foreign oil companies operating joint ventures here in Venezuela with PDVSA were horrified. In a highly unusual move, they sent protest letters to PDVSA, decrying the choice of Trenaco. We got access to several of them, criticizing Trenaco as under capitalized and under qualified to take on such a big endeavour.
00:01:38
In private, executives also told us they were worried about how fair and free the tender actually was. This comes amid mounting probes into PDVSA for alleged corruption.>> The Trenaco deal did eventually fall through early this year, given all that pressure, and Trenaco itself was liquidated. Yet many will see this as a symbol of Venezuela's deep problems.