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EU Discusses $65-70 Price Cap On Russian Oil

EU Discusses $65-70 Price Cap On Russian Oil

The European Union is currently…

Conoco Eyes PDVSA’s Caribbean Assets

ConocoPhillips has received court attachments for freezing the assets of Venezuelan PDVSA at two Caribbean facilities and might go on to sell them, Reuters reports, citing sources close to the developments.

The U.S. company was awarded compensation of US$2 billion by the court for the nationalization of its operations in Venezuela by the Hugo Chavez government. Yet this is just a fraction of what Conoco is seeking from PDVSA, which amounts to US$33 billion.

The processing, storage, and blending assets that Conoco is eyeing are located on three Caribbean islands—Curacao, Bonaire, and St. Eustatius—and account for about a quarter of the troubled Venezuelan state oil company’s annual oil exports.

If Conoco seizes them, 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.

One source told Reuters that the attachment of Caribbean assets by Conoco will make PDVSA unable to meet already made export shipment commitments.

PDVSA’s assets in the Caribbean include a 335,000-bpd refinery on Curacao complete with an oil terminal. One of the court orders that Conoco has obtained is for this facility, but according to the Reuters sources, it could not be enforced immediately.

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.

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.

By Irina Slav for Oilprice.com

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  • Naomi on May 07 2018 said:
    PDVSA cannot export without the managers and equipment in the Caribbean. Neither can Venezuela import gasoline without the refineries. The Venezuelan Army must now cut back from one meal per day to a half meal per day. The country must go without electricity. China can write off its Venezuela loans. It was all fun and games when the socialists were confiscating Conoco investments and handing free stuff to beggars. What goes around comes around.

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