Venezuelan state-run oil company PDVSA has limited the damage from a slump in crude oil exports by transferring oil between tankers at sea. It has also loaded vessels in Cuba, reports Reuters.
PDVSA has been under threat of asset seizures because of an arbitration award against it.
Venezuela is still fulfilling less than 60% of its obligations under supply deals with customers, and it has been pumping oil this year at the lowest rate in three decades. Its infrastructure has been poorly maintained, and workers are leaving the country.
PDVSA’s problems came to a head in May when US oil firm ConocoPhillips began seizing PDVSA assets in the Caribbean as payment for a $2bn arbitration award.
The ICC ordered PDVSA to pay the cash to compensate Conoco for expropriating the firm’s Venezuelan assets in 2007.
The seizures left PDVSA without access to key facilities including the Isla refinery in Curacao and BOPEC terminal in Bonaire.
Conoco’s actions also forced PDVSA to stop shipping oil on its own vessels to terminals in the Caribbean, and then onto refineries worldwide, to avoid the risk the cargoes would be seized in international waters or foreign ports.
PDVSA therefore asked customers to charter tankers to Venezuelan waters and to load from the company’s own terminals or from anchored PDVSA vessels acting as floating storage units.
In early June PDVSA told some clients it might impose force majeure, a temporary suspension of export contracts, unless they agreed to such ship-to-ship transfers.
PDVSA also requested the customers stop sending vessels to its terminals until it could load those that were already waiting on Venezuela’s coastline.
There were about two dozen tankers waiting last week to load over 22m barrels of crude and refined products at the country’s largest ports, according to Reuters data.
Customers were initially reluctant to undertake the transfers because of costs, safety concerns and the need for specialist equipment and experienced crew, but PDVSA has managed to export about 1.3m bpd of oil since early July, up from just 765,000 bpd in the first half of June, according to Thomson Reuters data, cited by Reuters.
PDVSA President Manuel Quevedo said on Tuesday that “we are not tied to one option or a single loading terminal. We have several (terminals) in our country and we have some in the Caribbean, which of course facilitate crude shipping to fulfil our supply contracts.”
One of those routes is Cuba, but this is for fuel rather than crude.
ConocoPhillips is also preparing new legal actions to get Caribbean courts to recognize its ICC award. If it succeeds in those efforts, it would be able to sell the assets to help satisfy the ruling.