The gradual reactivation of the Venezuelan oil industry, particularly through joint ventures between PDVSA and domestic and international private companies, poses significant challenges in terms of governance, internal control and legal risk prevention. In this context, integrity in the supply chain has become a central element not only for the ethical and reputational sustainability of projects, but also for the efficient cost control and optimization of legitimate business profits.

The experience accumulated in Venezuela and in other energy markets shows that contracting, procurement and supply processes are one of the main sources of exposure to irregular practices, especially when they take place in complex environments, with multiple intermediaries and high financial volumes. For this reason, the modern approach should not be reactive, but rather preventive, structural and risk management oriented.

Recurring risks in the oil supply chain

From the perspective of economic criminal law, the most common risks in the oil industry usually manifest themselves through schemes such as:

• Corruption in public and private contracting processes.
• Undeclared conflicts of interest in the selection and management of suppliers.
• Over-invoicing and under-invoicing of goods, services and industrial equipment.
• Manipulation of prices, qualities or quantities agreed upon.
• Use of intermediary companies with no real economic substance.
• Diversion of funds and money laundering derived from irregular operations.

These practices not only generate relevant criminal exposure, but also have a direct impact on the cost structure, distort operating efficiency and affect the financial viability of energy projects.

Legal framework: an overview

The Venezuelan legal system broadly contemplates crimes against public administration, economic and financial crimes, as well as conducts associated with organized crime and money laundering.. These criminal offenses may include both public officials and private individuals, managers and companies that participate directly or indirectly in irregular schemes.

In addition to this framework, the international criminal law, The impact of this is increasingly relevant for oil operations in Venezuela. Activities with transnational components may be subject to investigations, sanctions or legal proceedings in other jurisdictions, which reinforces the need to adopt compliance standards that go beyond the strictly local level.

Institutional background and lessons learned

In recent years, internal audits, administrative investigations and legal proceedings, supported by public information and official sources, have revealed the existence of numerous cases of irregularities in the oil sector, especially related to procurement processes, international contracting and supplier management.

Beyond the specific cases, this background information should be understood as institutional alerts that reveal structural weaknesses in the control and supervision systems. The main lesson is not punitive, but preventive: when there are no effective control mechanisms, risks tend to recur.

Crime prevention as a business management tool

The prevention of criminal risks in the oil industry must be conceived as an integral part of the strategic management tool, integrated into corporate decision making. A preventive approach allows:

• Protect the company and its directors from criminal liability.
• Avoid cost overruns resulting from irregular practices.
• Ensure traceability and transparency in the supply chain.
• Optimize business profitability through efficient procurement processes.
• Strengthen corporate reputation with partners, investors and international markets.

Essential measures include the implementation of criminal compliance programs, clear policies of zero tolerance for corruption, procedures, procedures for enhanced due diligence for suppliers, periodic audits, active management of conflicts of interest and internal whistleblower channels with early and effective responses.

Conclusion

The reactivation of the Venezuelan oil industry requires today higher standards of integrity, control and prevention of criminal offenses, especially in joint ventures with joint ventures with the participation of PDVSA. A well-governed supply chain not only reduces legal and reputational risks, but is also a key determinant of the quality of the supply chain. control costs, protect the company's assets and ensure the long-term sustainability of the business.

Specialized legal assistance in Venezuela

VENFORT LAWYERS has a team of experienced lawyers at economic criminal law, corporate criminal law and regulatory compliance, with extensive experience at the local and international in the design and execution of legal strategies oriented towards the prevention and prosecution of corruption in the business environment.

Our professionals have developed and accompanied complex criminal actions in defense of private companies and joint ventures, as well as policies of zero tolerance for corrupt practices, The company's activities contribute to the protection of corporate assets, the strengthening of governance and the consolidation of transparent and sustainable business environments.

Dr. Alan Aldana
Criminal Lawyer
International Partner
VENFORT LAWYERS