Venezuela arrests former oil bosses in deepening graft purge

By Alexandra Ulmer and Deisy Buitrago

CARACAS (Reuters) - Venezuelan authorities said on Thursday they detained two once-powerful officials who had run the oil ministry and state energy company PDVSA as part of a deepening anti-corruption purge also seen as a power play by leftist President Nicolas Maduro.

Engineer Eulogio Del Pino was thought to have participated in a $500 million corruption and sabotage scheme at the Petrozamora joint venture, while chemist Martinez was suspected of allowing a poor refinancing deal for U.S.-based refiner Citgo Petroleum Corp, which he used to lead, to go ahead without government approval, prosecutor Tarek Saab said in a televised speech.

Their detention is the biggest development to date in a months-old probe that has led to the jailing of about 65 executives in a sweep that has panicked PDVSA workers and stalled decision-making in the company that oversees the world's biggest crude reserves.

The arrests of Del Pino and Martinez put attention on Rafael Ramirez, who was Venezuela's oil czar for a decade and under whom both men ascended.

Maduro fired Ramirez, who was thought to have presidential ambitions, from his job as representative to the United Nations on Tuesday and summoned him back to Caracas, according to people with knowledge of the information.

Authorities appear to be seeking information on Ramirez from Del Pino and Martinez as splits widen in the ruling Socialist Party, according to one source with knowledge of the detentions.

Del Pino was picked up at his Caracas home, the source added. The oil executive did not respond to a Whatsapp message, although his profile picture had changed to one of his children from a photo of him at a PDVSA event with red-shirted workers.

Venezuela's Information Ministry, PDVSA, and the Oil Ministry did not immediately respond to requests for comment.

MADURO AMASSES POWER?

Oil industry sources say Maduro is using the graft purge to sideline political rivals and consolidate his grip on a sector that, despite falling investment and output, brings in more than 90 percent of the cash-strapped country's export income.

The unpopular leftist appears to be seeking to shore up his position as the country heads toward a presidential vote in 2018, when he is poised to seek reelection.

Ramirez had become an increasingly vocal critic of Maduro in recent months amid widening divisions in the leftist administration that his predecessor, the late Hugo Chavez, once kept firmly in check.

After surviving major political protests and pushing through a controversial pro-government legislative superbody, Maduro is feeling empowered and intent on cementing his position, according to government insiders and opposition politicians.

To ensure that support, military and political sources say that Maduro, who unlike Chavez does not hail from the army, has handed it more power.

Del Pino and Martinez had been removed from their posts on Sunday and replaced by a major general, giving the already powerful military further clout.

Their detentions followed the arrests in Caracas of six executives from Citgo on graft allegations last week.

(Additional reporting by Brian Ellsworth; Writing by Alexandra Ulmer; Editing by Andrew Cawthorne and Lisa Von Ahn)