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Breaking News:

Oil Rebounds On Surprise Crude Draw

Maduro Names Chavez’ Cousin As Citgo Boss

Maduro PDVSA

Venezuela’s President Nicolas Maduro appointed the cousin of late Hugo Chavez, Asdrubal Chavez, as the new head of PDVSA’s U.S. refining and marketing business, Citgo. The announcement comes in the wake of the arrest and removal of Citgo’s president and five senior executives earlier this week.

The arrests were part of a larger-scale corruption crackdown that also saw nine PDVSA executives and a deputy minister get detained on allegations of falsifying crude oil production numbers.

The arrests, and the appointment of Asdrubal Chavez who led the oil ministry of Venezuela between 2014 and 2015, are part of a stated “crusade” against organized crime that was initiated by Venezuela’s new attorney general, Tarek William Saab, who took office in August. Recently, Saab said he had unveiled a deal worth about US$4 billion, in which Citgo has been used as a guarantee. The deal, the AG said, would have been detrimental to Venezuela.

Embattled Venezuela stopped making payments on its debts earlier this month, and according to a growing number of sources is effectively in default. Its oil production is falling due to lack of funds to maintain fields and infrastructure. However, Venezuela may have found a replacement for at least part of its lost oil revenues: natural gas exports.

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Reuters reported earlier today that PDVSA was in talks with Colombia, Trinidad and Tobago, and Aruba, to ship natural gas to them. The country has substantial gas reserves offshore, but they have been neglected in favor of oil so far.

Until recently, Colombia was the one exporting gas to Venezuela, but now PDVSA has modified the pipeline that carried that gas so that it can flow in the opposite direction. The talks with Ecopetrol have taken a long time, a PDVSA official said, because of the weak gas prices, which have made it difficult to agree on the size of the export deal.

By Irina Slav for Oilprice.com

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