ConocoPhillips has seized the oil product inventory of Venezuela's state oil company PDVSA following the issuance of two court orders granting it this right as part of efforts to enforce compensation to the tune of US$2 billion awarded the U.S. company by court.
"PDVSA products from the installations of the Isla refinery have been confiscated. We don't have any way to get them," Reuters quoted Curacao's economic minister as saying. Steven Martina added that the ministry will host a meeting with Conoco and PDVSA later this week to discuss the matter.
Curacao's economy is dependent on the PDVSA refinery, Isla, which accounts for a tenth of the island's GDP and much of the employment on Curacao. The refinery has a capacity of 335,000 bpd of crude, but is currently operating at much lower than usual rates as the Venezuelan owner cannot access enough crude to feed into it.
Conoco obtained two court orders for PDVSA assets on three Caribbean islands earlier this month, and last week it made the first steps towards seizing control over them. The Isla refinery and the accompanying terminal were the assets covered by one of the attachment orders.
The other order is for PDVSA assets on St. Eustatius, where the Venezuelan company rents oil storage tanks at NuStar's Statia terminal. The sources told Reuters that Conoco has retained four million barrels of crude under its second court order. Related: Could Oil Hit $100?
On the island of Bonaire, PDVSA runs a 10-million-barrel export terminal that manages oil product shipments to international clients, with a focus on Asia. The Venezuelan state company also has a lease on a refinery and another storage terminal along with its U.S. division, Citgo.
If Conoco seizes all targeted assets, this would deepen the woes of PDVSA, which is already suffering a 33-percent decline in oil exports from their peak, a drop in oil production due to lack of funds to invest in field maintenance, and a matching decline in processing rates. Over the first quarter, Venezuelan refineries operated at just above 30 percent of capacity.
By Irina Slav for Oilprice.com
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