24 Million Barrel Backlog And Counting: PDVSA’s Fate Looks Bleak

Dozens of tankers waiting to load over 24 million barrels of Venezuelan crude are sitting at the country’s main oil export terminal, with the loading delays at almost a month, Reuters reports, citing shipping data. This could put the company in breach of its oil supply contracts with refiners such as Valero and oil majors such as Chevron and China’s CNPC.

There are more than 80 tankers sitting in Venezuelan waters, with half of them waiting to load crude oil and oil products, the data showed, with earlier reports citing sources from the company as saying it might have to declare force majeure on exports until the backlog is cleared one way or another.

One way would be by extending the delays and loading from the port. Another, proposed by PDVSA to several clients, would involve moving some tankers to a deepwater port and using ship-to-ship transfer of the cargo. The clients approached with this option are not too enthusiastic, however, mainly because of the higher costs and the lack of third-party supervision of the cargo transfer process.

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The amount that has to be loaded, according to Reuters, is equal to Venezuela’s total oil and oil product shipments for April this year, or 1.49 million bpd. That amount was also below the contracted volumes, which were for a total 2.15 million bpd.

In May, exports fell further as ConocoPhillips moved to seize export facilities of PDVSA in the Caribbean, aggravating the loading delays as the Venezuelan company had to redirect tankers to its own ports to avoid them being seized as well. Conoco is enforcing a court ruling that awarded it a substantial compensation for the forced nationalization of its assets in Venezuela by the Hugo Chavez government.

The tanker loading delays and the build of crude and fuels has also worsened Venezuela’s oil production situation, which is already grim enough. According to S&P Platts, the country has lost some 900,000 bpd in daily production since 2016 and in April pumped only an average of 1.41 million bpd.

By Irina Slav for Oilprice.com

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