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Ten tankers carrying various oil products are sitting anchored across the Caribbean awaiting payment for the delivery from Venezuela’s PDVSA, unnamed sources told S&P Platts. The vessels hold more than 3 million barrels of oil products, including heavy virgin naphtha and gasoline blendstock.
The troubled Venezuelan company has been slow to make payments for oil product cargoes, but it is making them, one of the sources said, adding that "We did not see them as big buyers for May deliveries of gasoline and diesel, so I guess they feel comfortable with the ships waiting."
Venezuela is suffering a shortage of heavy virgin naphtha, which is blended with the local heavy crude before it is shipped to the United States and Asia. This has added to woes such as the catastrophic decline in oil production due to lack of funds for field maintenance, and the resulting drop in refinery processing rates. This latter problem has forced the cash-strapped country to increase fuel imports to satisfy domestic demand.
PDVSA itself said in a recent technical report that its biggest refining complex, Paraguana refining Center, with a capacity of 955,000 bpd of crude was operating at just 19 percent of that.
Related: OPEC: The Oil Glut Is Gone
The Venezuelan state oil company has other problems, too. Two weeks ago, ConocoPhillips obtained two court orders for the seizure of PDVSA assets in the Caribbean in an attempt to enforce a court ruling that has awarded the U.S. company with US$2 billion in compensation for the forced nationalization of its assets by the Hugo Chavez government 11 years ago.
Conoco this week moved to seize some oil product inventory belonging to PDVSA from a Curacao storage terminal, after the island’s government gave it the green light. If Conoco seizes all targeted assets, which include a refinery, also on Curacao, and several storage facilities on two other islands in the Caribbean, it would seriously aggravate the struggling company’s situation.
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.