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Two days after ConocoPhillips moved to seize assets owned by Venezuela’s state oil company, PDVSA, in the Caribbean, shipping data revealed that PDVSA has diverted a tanker carrying crude from Russia from its course to offload it at Curacao, Reuters reports.
The Aframax tanker British Sygnet, the data shows, loaded at Primorsk, Russia, a month ago and set sail for Curacao. It was diverted on Monday, after the news about Conoco’s court orders—to seize inventories and other assets—became public. But a source from PDVSA told Reuters that it is not the first tanker to be diverted: at least nine other vessels have set sail for Venezuela and Cuba since Friday to avoid passing into the hands of the U.S. company, whose total demands for compensation from PDVSA reach US$33 billion.
PDVSA operates a 335,000-bpd refinery on Curacao, but now the refinery along with other PDVSA assets in the region are the target of two court orders that Conoco obtained in an effort to enforce a US$2-billion compensation ruling in its favor against Venezuela for the forced nationalization of its assets in the country.
The Caribbean is an important storage and processing hub for PDVSA. Its assets there include, besides the Curacao refinery, storage tanks on the island of St. Eustatius, a 10-million-barrel export terminal on the island of Bonaire, and a storage and blending terminal on Aruba, operated by PDVSA’s U.S. division Citgo.
If Conoco seizes the assets it is targeting, 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.
Venezuela’s oil production has slumped to the lowest in seven decades, and many analysts expect it to fall further as the cash-strapped country cannot afford to invest in field and equipment maintenance.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.