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U.S. Shale’s Glory Days Are Numbered

U.S. Shale’s Glory Days Are Numbered

That decline rates in U.S.…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

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U.S. Sanctions On Venezuela Hold Up Aruba Refinery Renovations

Refinery

The effects of U.S. sanctions on Venezuela’s economy have caused disruptions in planned upgrades for a key refinery in Aruba. Now the island’s government has reached out to the State Department to figure out a way forward, according to a new report by Reuters.

“The Aruba government has contacted American authorities to understand what is going on. The Dutch ambassador in Washington and lawyers in New York are also addressing issues related to the contract with Citgo,” Aruba’s Prime Minister Evelyn Wever-Croes told Reuters. “Sanctions (against Venezuela) are very firm. That is not something we can change. We are in the middle of this situation between the United States and Venezuela, and I don’t think that can be solved soon,” she added.

Citgo is a U.S. subsidiary of PDVSA, the Venezuelan government’s oil company, which is the target of sanctions that restrict the nation’s access to global capital markets as low oil prices crunch federal revenues. In 2016, the company had signed off on a 25-year lease on the Aruba facility, which mandated $685 million in refurbishments. The 235,000-barrel per day refinery is still functional, but the renovations are on hold.

The refinery has allegedly been a part of sanction-dodging regimes in the past. Previously, a Bloomberg investigation  uncovered a plan by Venezuela and Syria to circumvent Western sanctions on the Middle Eastern nation and ship its crude oil to Aruba to refine it and then market it internationally, including in the U.S.

The plan was never actually realized, but it involved selling Syrian oil to Venezuela at a substantial discount, and then shipping it through a Russian shale company to Aruba, which houses one of the world’s largest refineries, property of Valero Energy and run by PDVSA.

By Zainab Calcuttawala for Oilprice.com

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