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The Bullish Case For Oil

The Bullish Case For Oil

Oil demand is looking shaky,…

PDVSA Directs Oil Buyers To Russian Bank Account: Report

PDVSA

Venezuela’s troubled state oil company PDVSA is telling the buyers of oil produced by its joint ventures to deposit the money for purchases in a new bank account recently opened at Russia’s Gazprombank, Reuters reports citing an internal document and sources in the know.

The report follows statements from the opposition—whose leader and President of the National Assembly declared himself interim president last month—that a special fund will be set up in the United States where proceeds from the sale of Venezuelan crude would go.

However, to make matters more interesting, Gazprombank was quick to deny the Reuters report. RT quoted the bank as saying, “No new accounts have been opened,” adding that the Reuters report “does not reflect the actual situation.” Yet the bank also said PDVSA had several accounts in it, although all of them were opened several years ago.

PDVSA exploits the vast reserves of oil in the Orinoco Belt via several joint ventures, including companies such as France’s Total, Norwegian Equinor, and even a U.S. supermajor, Chevron. At the moment, Venezuela produces around 1.1 million bpd of crude, which is the lowest in several decades, leading to a slump in exports to a multi-decade low as well. Wood Mackenzie analysts expect this to fall to 900,000 bpd as a result of increased U.S. pressure on Caracas.

Meanwhile, while the Maduro government grapples with an increasingly complex political situation, opposition leader Juan Guaido has declared that he will be appointing new board of directors of PDSVA and its U.S. business, Citgo. The declaration came on the heels on a statement from U.S. Treasury Secretary Steven Mnuchin that all proceeds from sales of Venezuelan crude to U.S. refiners would be withheld unless PDVSA recognized Guaido as the legitimate leader of the country, which the company has not done so far.

By Irina Slav for Oilprice.com

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