Venezuela’s PDVSA Drowns in Transport Costs
Bottom line: Transport costs are a sieve winnowing away Pdvsa's profits and a recent investigation appears to show that at least three ships commissioned and inaugurated in public ceremonies by Pdvsa this year never set sail.
Analysis: In 2006, Hugo Chavez ordered the construction of 42 oil tankers to serve Venezuela's state oil company, Pdvsa, which pays up to $15,000 a day to rent such ships. Reuters reported that they saw internal reports showing that in March 2013 Pdvsa had to lease 75 tankers from third parties, a huge cost to the state oil company. Contracts for those immediate and necessary services remain desirable for service providers. So it makes sense that Pdvsa would want to expand its own fleet, though just five new ships have been built since the 2006 mandate. At least three ships that were supposedly completed this year are apparently still at the shipyards abroad where they were built. The boats in question include "Eva Peron" (built in Argentina), "Carabobo" (in China) and "Sorocaima" (in Iran). A fourth ship, the Ayacucho, built in China, was delivered on Friday, 4 October. This highly publicized delivery came right after Reuters exposed the internal reports. Now officials are saying they expect a second delivery from China for the Boyaca ship, with the Carabobo to arrive in May 2014 and the Junin soon after that-all from China.
Recommendation: It is unclear what the hold-up is, whether failure by the Venezuelan government to make payments or incomplete…
Bottom line: Transport costs are a sieve winnowing away Pdvsa's profits and a recent investigation appears to show that at least three ships commissioned and inaugurated in public ceremonies by Pdvsa this year never set sail.
Analysis: In 2006, Hugo Chavez ordered the construction of 42 oil tankers to serve Venezuela's state oil company, Pdvsa, which pays up to $15,000 a day to rent such ships. Reuters reported that they saw internal reports showing that in March 2013 Pdvsa had to lease 75 tankers from third parties, a huge cost to the state oil company. Contracts for those immediate and necessary services remain desirable for service providers. So it makes sense that Pdvsa would want to expand its own fleet, though just five new ships have been built since the 2006 mandate. At least three ships that were supposedly completed this year are apparently still at the shipyards abroad where they were built. The boats in question include "Eva Peron" (built in Argentina), "Carabobo" (in China) and "Sorocaima" (in Iran). A fourth ship, the Ayacucho, built in China, was delivered on Friday, 4 October. This highly publicized delivery came right after Reuters exposed the internal reports. Now officials are saying they expect a second delivery from China for the Boyaca ship, with the Carabobo to arrive in May 2014 and the Junin soon after that-all from China.
Recommendation: It is unclear what the hold-up is, whether failure by the Venezuelan government to make payments or incomplete work on the part of the builders, but maritime experts say the circumstances are highly unusual. Even more unusual is that it took a Reuters expose to get the first ship delivered from China.
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