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The operator of an oil terminal operated by Venezuela’s state oil company PDVSA has declared bankruptcy, blaming it on U.S. sanctions, Reuters has reported, citing court documents.
According to the court documents, the operator of the terminal on the Caribbean island of Bonaire filed for bankruptcy earlier this month, saying it could not keep paying its debts because U.S. sanctions had cut off its access to “international trade” and to cash in bank accounts.
However, the company, Bonaire Petroleum Corporation, said in its filing that there was a third party that could provide the money it needed to “satisfy its preferred creditors and offer a settlement to its unsecured creditors.”
The Reuters report notes that Bonaire Petroleum Corporation could store up to 10 million barrels of crude at its terminal and load tankers from deepwater docks. The company was ordered last year to remove the oil because of the danger of tank leaks.
There must have been hope in Venezuela that the new U.S. administration would lift sanctions, similar to its positive signals to Iran. However, President Biden is in no hurry to do that until his Venezuelan counterpart Nicolas Maduro gives a stronger signal that he is ready to negotiate with the opposition.
Meanwhile, the Maduro government is trying to turn things around for its battered oil industry that was the focal point of U.S. sanctions because of its vital importance for the Venezuelan economy.
Earlier this month, Maduro said the Venezuelan National Assembly would consider reforms to the country’s oil law that would open the door to “new business models.”
Foreign companies have expressed interest in getting their hands on some of Venezuela’s massive oil reserves, the biggest crude reserves in the world. But most international oil firms, especially the biggest ones with exposure to the U.S. stock and banking markets, will wait for U.S. sanctions to potentially ease before trying to enter the Venezuelan oil sector again.
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.