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PDVSA Settles With NuStar On Caribbean Storage Hub

Venezuela’s state-owned oil company, PDVSA, has struck an agreement with oil storage facilities operator NuStar to resume the use of a terminal on the Caribbean island of St. Eustatius, Reuters reports, quoting NuStar.

The news comes on the heels of another report: yesterday PDVSA also reached a settlement with ConocoPhillips to pay the U.S. company US$2 billion, awarded to it by an international court for the forced privatization of two projects in Venezuela in the early 2000s.

The St. Eustatius terminal was one of the PDVSA owned or used assets in the Caribbean that Conoco earlier this year seized in an effort to force the Venezuelan company to pay its dues. PDVSA resisted as long as it could, but apparently push came to shove and PDVSA found the money to settle with both companies.

In an email to Reuters, NuStar said “We can confirm that we have signed an agreement with PDVSA, which brings their account current. This agreement improves the earnings outlook for our St Eustatius terminal for the remainder of 2018.”

The news will probably also improve PDVSA’s performance outlook for the rest of the year: Conoco’s asset seizure severely challenged the Venezuelan company’s ability to fulfill its oil cargo delivery commitments. But NuStar has also made life difficult for the company on several occasions when it suspended its access to the St. Eustatius terminals because of millions in missed payments. The NuStar dispute made it more difficult for Conoco to seize PDVSA’s oil stored on the island.

The Caribbean assets that Conoco seized earlier this year to make PDVSA pay up were two tankers with a combined load of 800,000 barrels of crude and oil products, a 10-million-barrel oil storage facility, and fuel inventory at a 335,000 bpd refinery.

Conoco is one of several companies suing Venezuela for the nationalization of assets by the Chavez government. Another one, Canadian miner Crystallex, earlier this month won approval from a U.S. judge to go after PDVSA’s U.S. subsidiary Citgo to recover the damages it claimed from the nationalization of its Venezuelan operations.

By Irina Slav for Oilprice.com

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