Venezuela's state-owned oil firm PDVSA is moving to market its crude oil overseas by enlisting its joint venture partners, including U.S. supermajor Chevron, to sell cargoes to buyers in Asia and Africa, Reuters reported on Monday, quoting PDVSA documents and sources at the joint ventures.
Even with the U.S. sanctions on its oil, PDVSA's partners in the various joint ventures could market cargoes not breaching those sanctions, if the oil revenues are used to repay debts of those joint ventures, sources told Reuters.
The U.S. sanctions on Venezuela's oil exports essentially ban U.S. imports of oil from Venezuela, and the Latin American country saw its total exports slump in 2019.
Russia's Rosneft has emerged as the biggest trader of Venezuela's crude oil, as it helps PDVSA sell its oil and arrange the financing.
But now, PDVSA is trying out the new method to sell its oil by allocating cargoes to joint venture partners in its projects in Venezuela, according to Reuters' sources and shipping documents it has reviewed.
Chevron is a partner of PDVSA in the Petropiar and has a license to operate in Venezuela until January 22. The U.S. Treasury has renewed Chevron's three-month licenses to continue operating in Venezuela several times.
Chevron has lifted three cargoes so far, two in Q4 2019 and one in January, according to Reuters' sources and the PDVSA documents it has seen.
Referring to the oil cargo sales, Chevron spokesman Ray Fohr told Reuters:
"Proceeds from these marketing activities are paid to our joint venture accounts to cover the cost of maintenance operations, in full compliance with all applicable laws and regulations."
Meanwhile, Venezuela has managed to gradually increase its crude oil production in recent months.
According to the latest Reuters survey of OPEC's oil production, Venezuela managed to raise its output in December, which, if confirmed in OPEC's figures later this month, would mean that the country exempt from the OPEC+ cuts and under U.S. sanctions would have had a three-month streak of rising production.
By Tsvetana Paraskova for Oilprice.com
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Comments
China and Russia have been openly defying US sanctions by enhancing Venezuela’s crude oil production and also by helping it to sell its crude oil around the world and get paid for it respectively.
That goes to show that US sanctions against both Iran and Venezuela will not deter the two countries from exporting their crude oil.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London