• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 3 hours One Last Warning For The U.S. Shale Patch
  • 10 hours Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 7 hours Chile Tests Floating Solar Farm
  • 2 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 17 hours Poll: Will Renewables Save the World?
  • 1 hour China's E-Buses Killing Diesel Demand
  • 17 hours New Rebate For EVs in Canada
  • 8 hours Trump Tariffs On China Working
  • 8 hours Biomass, Ethanol No Longer Green
  • 11 hours Trump sells out his base to please Wallstreet and Oil industry
  • 1 day Boeing Faces Safety Questions After Second 737 Crash In Five Months
  • 20 hours The Political Debacle: Brexit delayed
  • 15 hours 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 11 hours Read: OPEC THREATENED TO KILL US SHALE
Why This Oil Price Rally Has A Limit

Why This Oil Price Rally Has A Limit

While oil markets are tightening…

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

Petroleo

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.

Related: New Technology Could Wipe Out Trillions In Fossil Fuel Investment

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

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Randolph on June 07 2018 said:
    Venezuela must shut down the oil fields when the tank farm is full.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News