Venezuela arrests head of oil firm PDVSA's Bariven unit - sources

By Alexandra Ulmer

CARACAS (Reuters) - The head of Venezuelan oil company PDVSA's subsidiary Bariven was arrested this week, according to two sources and an internal message seen by Reuters, as a graft investigation in the OPEC member swells.

Francisco Jimenez, the head of procurement arm Bariven, was detained on Tuesday afternoon at PDVSA's Caracas headquarters, the internal message read. Another executive, Joaquin Torres, was detained alongside him, according to the message.

PDVSA did not immediately respond to a request for comment about the arrests. Chief prosecutor Tarek Saab was due to make an announcement on "legal advances in the Bariven case" later on Thursday.

About two dozen high-level executives have been arrested in recent weeks, ridding PDVSA of much of its top brass. Last week, Spanish authorities arrested a former Venezuelan deputy minister and three former executives at state companies for alleged links to money laundering and international corruption.

Bariven has been in the spotlight since 2015, after U.S. authorities arrested two prominent Venezuelan oil businessmen on charges of violating the Foreign Corrupt Practices Act (FCPA). Both men have pleaded guilty to bribing PDVSA officials in order to win juicy contracts with Bariven.

Socialist-run Venezuela originally slammed the investigations as sabotage by the U.S government, its ideological foe.

But in a turnaround, PDVSA said in July last year it was actually a victim of fraud and Bariven then asked a U.S. court to order the two businessmen to compensate it for $600 million in losses.

President Nicolas Maduro's government and PDVSA, which is formally known as Petroleos de Venezuela SA, have repeatedly vowed to take steps to combat corruption, which has affected the nation and its oil industry for decades.

Opposition leaders say PDVSA has been crippled by malfeasance under 18 years of socialist rule. They say sporadic arrests are the result of infighting among rival government factions.

Sources close to PDVSA say the arrests owe more to turf wars for control of the company, which is the financial motor of Venezuela's ailing economy, than a wholesale effort to clean up graft.

Several oil industry sources have said workers at PDVSA are increasingly nervous about the spreading graft probes.

(Reporting by Alexandra Ulmer; editing by Susan Thomas)