US embassy cable - 05CARACAS3659

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 003659 
 
SIPDIS 
 
E.O. 12958: DECL: 08/11/2015 
TAGS: EPET, EINV, PGOV, PREL, PHUM, KDEM, VE 
SUBJECT: PIPELINE EXPLOSIONS QUICKLY CONTROLLED 
 
REF: CARACAS 03647 
 
Classified By: Economic Counselor Andrew N. Bowen for Reason 1.4 (D) 
 
1.  (C) SUMMARY: As noted in reftel, an explosion, possibly 
caused by an explosive device, occured on the Ule-Amauy oil 
pipeline on Saturday evening.  Authorities quickly controlled 
the explosion and it will not have an impact on production in 
western Venezuela.  Another explosion occured on a nearby gas 
pipeline without causing significant damage, and explosive 
devices were reportedly found on another portion of the gas 
pipeline.  The GOV quickly blamed ex-PDVSA employees.  Oil 
executives told the Embassy that the speed with which the 
authorities responded to the explosions was suspicious. 
Possible explanations range from the GOV placing the 
explosives themselves to discredit the opposition to shoddy 
maintenance.  END SUMMARY 
 
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EXPLOSIONS SATURDAY EVENING 
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2.  (SBU) Energy Minister and PDVSA President Rafael Ramirez_ 
announced in a December 4 press conference that an explosion 
occured at 8:40 the evening of December 3, on Line 1 the 
Ule-Amuay oil pipeline, which carries 150,000 barrels of oil 
daily to the Paraguana Refining Center (CRP).  No one was 
injured in the explosion.  According to Ramirez_, authorities 
had the situation under control by 11:45 PM, but high 
temperatures from the blaze damaged Line 2, which carries 
250,000 barrels of oil per day to CRP.  Ramirez_ said the 
incident would not have any effect on production since CRP 
has inventories equal to five days production.  In addition, 
a tanker with 400,000 barrels of oil was standing by to 
supply CRP if necessary.  Repairs were carried out on both 
line Sunday.  Ramirez_ said Line 2 should be operational on 
December 5 and Line 1 should be back on line within three to 
five days. 
 
3.  (SBU) In addition to the explosion at the oil pipeline, 
Ramirez_ also claimed during the press conference with Justice 
and Interior Minister Jesse Chacon that a small explosion 
also occured occured at Kilometer 27 of a gas pipeline that 
supports production in the Ule operational area.  The 
explosion was not powerful enough to damage the pipeline.  He 
said explosives were found at Kilometer 25 of the same 
pipeline. Ministry of Interior Jesse Chacon said December 4 
that GOV investigators found traces of C4 around the area. 
 
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NEW LEVELS OF EFFECIENCY 
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4.  (C) ExxonMobil executives told Petroleum Attache (Petatt) 
on December 5 that they found the whole incident rather 
suspicious.  Fire trucks seemed to be prepositioned in 
anticipation of the oil pipeline explosion.  They also 
thought the blaze was brought under control very quickly, 
considering the event was completely unexpected.  Finally, 
they were incredulous that the authorities were able to find 
the explosive device at Kilometer 25 of the gas pipeline in 
the middle of the night.  The executives believe the GOV 
orchestrated the whole series of events in order to discredit 
or perhaps eventually cast blame on Manuel Rosales, the 
opposition governor of Zulia. 
 
5.  (C) A senior executive from a major service company told 
Petatt that he believes the incidents were either the result 
of inept management and lack of maintenance on the part of 
PDVSA, or carried out by GOV authorities themselves.  He 
noted senior GOV officials have expressed concern over the 
last two weeks about the decline in the price of oil.  He 
said he personally believes senior GOV officials are starting 
to panic over recent price declines. (NOTE: Ramirez_ has 
publicly expressed concern over increases in production in 
the Gulf of Mexico.  In addition, the GOV has proposed new 
price bands in recent OPEC meetings.  END NOTE)  The 
executive believes the GOV may have carried out the "attacks" 
in order to raise the level of uncertainty in the oil markets 
and push up prices. 
 
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COMMENT 
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6.  (C) While we would be surprised that the GOV would blow 
up its own infrastructure, we note it would make a convenient 
excuse to retaliate against Zulia Governor Manuel Rosales by 
alleging he somehow was behind the plot in hopes of 
disrupting the elections.  Neither can we rule out extremists 
from the opposition, as the GOV would like everyone to 
believe, though it seems an odd target with the opposition 
more focused on GOV electoral authorities right now.  The 
most plausible explanation, without more information, would 
be that the GOV fabricated the bomb story to distract 
attention from chronic maintenance problems. 
BROWNFIELD