PIPELINE EXPLOSIONS QUICKLY CONTROLLED

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

--------------
EXPLOSIONS SATURDAY EVENING
--------------

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.

--------------
NEW LEVELS OF EFFECIENCY
--------------

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.

--------------
COMMENT
--------------

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