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James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Venezuelan Oil Tankers are Launched and then Abandoned at the Dock

Venezuelan Oil Tankers are Launched and then Abandoned at the Dock

Over the last 14 months, Venezuela has held launching parties for three new oil tankers, a clear sign of the nation’s ambitions to expand its fleet as it prepares to diversify into the Asian markets.

One glaring problem stands in the way. The tankers, built at shipyards in Iran, Argentina, and China have never actually arrived at Venezuela, in fact they have not left the shipyards where they were built.

The new tankers were part of Ex-President Hugo Chavez’s plan to stimulate the shipbuilding industries in Iran, China, Argentina, and Brazil (all allies to the socialist country), and try to reduce US power. PDVSA, the nation’s state-owned oil company, is struggling from falling production volumes and a tight cash-flow, and hoped that by increasing its own fleet size, it could avoid high lease prices that are costing it hundreds of millions of dollars a year.

Related article: Brazil Pre-Salt Reflects Changing Face of Energy Investment

An internal report from March shows that PDVSA leased 75 tankers, paying as much as $15,000 a day for each tanker.

The three tankers launched represent just a small percentage of the 42 vessels PDVSA ordered back in 2006 as part of its plan to replace its entire fleet by 2012. A total of five tankers have actually set sail.

Some analysts have suggested that part of the problem for the unknown delays is that Venezuela, by trying to develop its allies shipbuilding industries, is using shipyards that lack some of the most modern shipbuilding technologies, and therefore take much longer than other larger yards which could build the tankers in three to four years.

Gustavo Gonzalez, the president of the Venezuelan merchant marine officers’ association, explained to Reuters that “when a vessel is launched to the sea, it is because it is ready. The delivery normally occurs 2-3 months after the launching.”

Sebastian Aguilar, a spokesman for the Rio Santiago shipyard in Argentina, said that the “Eva Peron is still at the dockyard. It was launched in July 2012 and is currently in the last stage, getting equipment ready before its final delivery.”

Related article: Deadly Explosion at Venezuelan Oil Refinery a Result Sabotage

Iran’s former commerce minister states that the Sorocaima is ready for delivery, and just waiting at the Sadra shipyard.

PDVSA’s Sorocaima
PDVSA’s Sorocaima. (Arabian Gazette)

And the Carabobo, being built at the Bohai shipyard in China, is not yet ready for navigation, and so not available for delivery.

Why then the elaborate launching parties?

Whatever the reason for the delays, it is clear that Venezuela’s plans to expand its fleet are stumbling, and it will be forced to once more pay hundreds of millions on leasing tankers to make its deliveries.

By. James Burgess of Oilprice.com



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