PDVSA’s debacle

For Thursday, May 10, 2018. Translated by Javier Liendo.

57
Photo: Reuters

After the U.S. pulled out from the nuclear deal with Iran, oil prices rose again and Venezuela can’t take advantage of the situation due to plummeting output. In fact, Iraq’s Oil Minister Jabbar Alluaibi said this Wednesday that by the end of this month, OPEC will discuss a possible deficit in global supply. Alluaibi said that this is a political matter and that he hopes it won’t affect oil supplies from the Persian Gulf. Meanwhile, American oil company ConocoPhillips confirmed that it will exhaust all legal options to collect PDVSA’s debt, a statement that concerned, among others, prime minister of Curaçao Eugene Rhuggenaath, due to the possibility that PDVSA ceases oil shipments to the Isla refinery to avoid an embargo by ConocoPhillips, which could cause a crisis in Curacao’s small economy. The Isla refinery contributes close to 10% of Curacao’s GDP and supplies fuel for communities and the ships coming to the island. PDVSA doesn’t own the refinery, it only operates it under a lease contract. To make this scenario even more complicated, PDVSA now faces the lawsuit for over $25 million in an U.S. court for the non-payment of promissory notes issued by Canadian energy contractor SNC-Lavalin. With sinking revenue do to such a low production —caused by mismanagement and corruption— the scenarios are completely unfavorable. The projection of economist and risk assessor Leonardo Buniak on the risk that Venezuela ceases to be a net oil exported by 2019 gains traction. Buniak added that: “Today, the Venezuelan economy is smaller than in 1994 and in just four months, the country’s monetary liquidity went from Bs. 127 billion to Bs. 595 billion,” boosting hyperinflation even more.

Chaos politics

The government hasn’t been making any decision in response to an economic scenario of greater contraction and shortages. In chavismo’s version of the country, the important isn’t urgent and the only open board is to cling to power. This is why yesterday, Vice-President Tareck El Aissami spoke of the nearly Bs. 18 billion approved to pay for salaries of mayors and governors, after his meeting with ministry representatives. More money without backing because they’re taking no action to reactivate national production. Meanwhile, Diosdado Cabello announced last night the possibility of activating recall referendums against National Assembly lawmakers after May 20, and this happened while Miguel Ángel Martín, chairman of the Supreme Tribunal of Justice in exile, sent letters to the military and police high commands urging them to arrest Nicolás.

Additionally, Venezuela currently ranks as the 7th country in the world with the most people arrested without a trial and the second worst performance in timely trials in South America, keeping a huge percentage of prisoners awaiting justice.

Only social media talks about elections

The hashtag used yesterday by chavista bots was a threat and not an invitation: vote if you want peace. However, National Electoral Council (CNE) rectora Socorro Hernández said that it was absurd that certain sectors think that the CNE could tamper with May 20 results, emphasizing that this complaint is a political strategy of “certain abstentionist opposition groups.” She forgot to explain the case of Andrés Velásquez in Bolívar State. A meeting was held between Armed Forces authorities, the CNE and representatives of the candidates to discuss Plan República. The statements of Defense Minister Vladimir Padrino López were closer to those of a militant for the regime’s cause than to those of an impartial minister. Candidate Reinaldo Quijada spoke against Nicolás and chavismo’s contradictions, but he defended PSUV grassroots and the possibilities of socialism. Meanwhile, Nicolás announced in Yaracuy a Bs. 1,500,000 bonus for all mothers and grandmothers in Mother’s Day; he also promised resources to built 70,000 new housing units and the incorporation of 50,000 young citizens to the Chamba Juvenil program.

He took the “blame” because one of his militants still hasn’t got a house and after asking her for patience, he guaranteed her a house “for this very day.” So far, there are no news of the meeting in which Henri Falcón and Javier Bertucci would allegedly define a single candidate.

Briefs and serious

  • Several universities staged a strike called by the Venezuelan Federation of Associations of University Professors to protest for budgetary conditions. Due to lack of budget, the National Experimental University of Táchira (UNET) declared the suspension of academic activities.

  • In 72 hours, two children died of measles in the J.M. de los Ríos Children’s Hospital. The current measles epidemic continues to spread and since the first case was recorded (July 2017, after ten years without records of the disease) until the third week of April 2018, the Health Ministry reported 1,631 confirmed cases in 13 states in the country. Delta Amacuro is the state with the highest incidence rate and Venezuela heads the list of countries with the greatest measles contagion.
  • The National Bureau for the Defense of Socio-economic Rights (SUNDDE) and the National Guard announced the confiscation of 134 tons of food stored in a warehouse in Catia, and they also confiscated weapons of several calibers, cartridges and tear-gas canisters. They also arrested four citizens.

  • Civil Protection issued an “early alert” for the rains in Barinas, Zulia, Táchira and Mérica. According to them, weather conditions will improve in the next 72 hours.

Abroad

  • U.S. Vice-President Mike Pence said that his country won’t stay idly by “while Venezuela crumbles into dictatorship and oppression,” without explaining what will be their next actions. He restated his demand for Nicolás to restore democratic institutions, to set aside the sham elections for May 20 and to open the nation to humanitarian aid.

  • The mother of one of the 82 Venezuelans arrested in Trinidad and Tobago, denounced that her son remains detained until he pays the $1,500 fine for being in the island illegally. Venezuela didn’t guarantee the return of all deported citizens.
  • Álvaro Uribe Vélez’s party put up inappropriate banners urging Colombian citizens to vote for their candidate Iván Duque, “so that Colombia doesn’t become another Venezuela.”
  • Rebeca Grynspan, in charge of the Ibero-American General Secretariat, advocated yesterday for a “peaceful and institutional solution” in Venezuela, saying that “the role that the European Union can pay is very important.”
  • The Pan American Foot-and-Mouth Disease Center and the South American Commission for the Fight Against Foot-and-Mouth Disease will donate vaccines for the National Federation of Livestock Farmers of Venezuela if the government exonerates them from paying tariffs and if those responsible for the distribution belong to the private sector.
  • After almost a month of protests against Daniel Ortega’s government, Managua reported the largest march in its history. Aerial shots are astonishing.
  • The military high commands and Defense ministers of 12 American nations met to study security threats and to agree on joint strategies to fight organized crime. Padrino López didn’t attend.
  • The article “Stop Enslavement of Venezuelan Refugees in Brazil,” signed by Chris Feliciano Arnold for the New York Times, is tough and enlightening. I’ll leave it here for you.
  • The health director of the International Federation of Red Cross and Red Crescent Societies (IFRC), Emanuele Capobianco, reported that a million people entered Colombia in the last year.
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57 COMMENTS

  1. “Álvaro Uribe Vélez’s party put up inappropriate banners urging Colombian citizens to vote for their candidate Iván Duque, “so that Colombia doesn’t become another Venezuela.”

    Why is it inappropriate?

    Just asking, because there are a bunch of typos in this piece, and I thought this might be another one.

    • I would also like an answer to this question. To me, it seems like a hopeful sign that chavismo is being used as an awful warning.

    • “Why is it inappropriate?”

      Because at heart, almost all “journalists” are marxists [stand by for deletion of this reply]. No matter how much factual content may inadvertently creep into their reports, their agenda and opinion still furthers the “glorious revolution” (a.k.a. destruction). That they observe the naked truth in Vz and elsewhere, yet still push the most murderous and destructive philosophy ever, reveals everything about them.

      • But it’s Naky, just giving a quick summary of one of many stories of the day.

        I really think it’s just a typo, and should have been “appropriate.”

        • That’s how it works. You reject their explicit written word in favor of your own fantasy version. People hate the truth.

          • Naky writes in Spanish and Javier translates to English.. it seems you’re new here Davy… chill, there are bigger issues than uribe banners.

          • Gringo 2…

            Thanks. I just think it’s the translation that got screwed up, especially since I mentioned the other typos here.

            I’m pretty sure Naky doesn’t speak English at all, which is damn okay. And even if she did, she would be nuts to admit it to reply to the attacking posts here.

            She gives…every fucking day…a more complete synopsis of what’s going on in VZ than you can find ANYWHERE. It’s pretty amazing when you think about it.

            Where else on the Internet can you find this information on a DAILY basis?

            She’s worked so hard and for so long, and hardly any compensation, it’s hard to believe she’s Venezuelan in the first place.

      • At least they hold elections in Nicaragua. Maybe a little cheating, but parties other than Ortega’s were in control for years, and he got elected again in 2016. They export some $200 million in agricultural products to Venezuela.

  2. “Meanwhile, American oil company ConocoPhillips confirmed that it will exhaust all legal options to collect PDVSA’s debt,” In Three…Two…One…Buitres del Imperio! Otro ejemplo imperialista de la guerra economica contra el pueblo soberano, Boliviariano de Venezuela. Oh I forget. Rechazamos!

    • I don’t get it.

      I read the refinery on one of the islands…forget which…is leased by PDVSA. So what is ConocoPhillips going after? Just the oil going there?

      • Yes … That is why tanker ships head to or already at the islands left and are now sitting on the Venezuelan coast just out side of the harbors. PDVSA did not want the oil confiscated by ConocoPhillips.

        This is going to be a very big issue for PDVSA and Venezuela as most of the oil for China is shipped thru the islands. Venezuela’s heavy oil goes to the islands to be mixed down with light crude from other countries (US, Russia, Nigeria, etc) before it can be shipped to China. As Venezuelan refineries do not have the capacity to mix and process in country before shipping to China.

        This will limit and reduce shipments to China that pay off the large loans that China made to Venezuela.

        One more shoe has just dropped ……

      • That’s my assumption as well. The “vultures” will also seek to seize any oil/assets that is floating around the world belonging to PDVSA.

        • I know that PDVSA had to start leasing tankers a few years ago out of fear of confiscation of the entire boats, so I was under the assumption that at one time, they had their own fleet.

          Don’t know if that’s true, but I do know like most people doing business with PDVSA, the leasing companies make them pay in advance!

    • Vultures may be odious, vultures may be disgusting.

      But the vultures would not be moving to feast on the corpse if it wasnt for the killers gutting PDVSA and leaving the carcass exposed.

  3. “U.S. Vice-President Mike Pence said that his country won’t stay idly by “while Venezuela crumbles into dictatorship and oppression,” without explaining what will be their next actions…”

    Puffery

    Venezuela is already into full on dictatorship and oppression. Trump/Pence are as bad as Maduro/Diosdado when it comes to mindless, verbal diarrhea.

    The US won’t send in the Marines (the reasons are myriad), but be assured that the United States has at its disposal any number of nefarious techniques and underhanded strategies to make Maduro’s Venezuela a literal shitstorm. And they WILL utilize these methods. (Latin American history is awash with the exploits of various American follies. Chile. Nicaragua. El Salvador. Honduras. Colombia.)

    If Maduro thinks things are bad now, wait until not a single barrel comes out of Amuay due to monkey-wrenching. (Hey… them PdVSA engineers need to get paid… Uncle knows who to pay!)

    • “Puffery”

      Yes, political puffery, but necessary. The US administration seems to understand that no external force could damage the Vz government as rapidly as chavismo itself. If they are smart, they will do the minimum for as long as is practical.

      • Totally agree. The US needs to do nothing. As a matter of fact, it is the BEST thing to do. Because the more Maduro does, the more Maduro is to blame. Chavismo keeps insisting that the Marines are ready to storm the beaches… and nothing for the last 18 years. They keep insisting that the US is waging an economic war, and all they have is rhetoric.

        This is quite possibly going to be the easiest “topple” in the history of the world.

        • This is where I totally disagree with you.

          If the U.S. does nothing more at this point, it’s STILL going to be accused of waging an economic war. So why not oblige Maduro and take the steps necessary to put this rabid fucking puppy to sleep?

          Oh, I have real problems with people objecting to actions based on fear on how the enemy is going to eventually twist those actions to their supposed advantage.

          Who cares, as long as you kill that fucking rabid puppy?

    • Interesting, thanks. I’d love to see an explanation why OTPOR / Gene Sharp type movements have not (yet) succeeded in dear old Venezuela!

      • Well, as I see it, everybody there considers themselves Armenian. In Venezuela Chavistas claimed whoever voted for the opposition was an “apatrida”. Someone without a State. In the minds of Chavistas, we are a bunch of sifrinos that hate Venezuela. Remember what Delcy says in Carib all the time “Only we are people”.
        This cultural dilemma is at the heart of our struggle, they don’t consider non-chavistas Venezuelan.

  4. Oil sold to third parties belongs to the buyer so they are not subject to seizure by Pdvsa creditors , but the prices to be paid pdvsa for such supplies is subject to seizure if the buyer is in a country where the courts allow Pdvsa creditors to seize or freeze any amounts owed Pdvsa , the end result is the same , Pdvsa gets no money from oil supplies sent anywhere but china , or other places where the arm of US courts doesnt reach…problem with Curacao refinery is that the oil sent there does belong to Pdvsa so it can be seized by Pdvsa creditors ……..the bonaire terminal storage and blending facilities belongs to Pdvsa and can be seized , the oil there either belongs to Pdvsa or to the Republic not to china which only recieves the property after the ol is blended and shipped so it too can be seized…….., normally tankers used to pick up Pdvsa supplied cargoes are either chartered by the buyers (so they cannot be seized) or to chartered to Pdvsa ,if the charter is a spot charter then the vessel cannot be seizd because neither it nor its cargo will belong to Pdvsa , but if its time chartered it might be possible to seize the cargo because in that case the ships fuel is deemed the property of the charterer and if the charterer is Pdvsa it can be seized ……

      • Ownership over the oil supplied to China passes to China once the heavy venezuelan crude already blended with light oils or diluents at the storage facilities in the terminal is transferred on board the vessel which is to carry it to China , before that it belongs either to Pdvsa or the Republic and can be seized by their creditors, of course assumming the crude and light oils are outside Venezuela (In bonaire or Curacao for example) or in the latter case in transit from the US or Russia to bonaire or COT or St Esutaquious ……..!!

        • But those shipments aren’t based on standard accounting practices.

          Like, if tomorrow, VZ entered into a contract with and promised Russia or China 10 billion barrels of oil (yes, I said billion) over the next xx(x) years…at 10 cents on the dollar because it’s the only way PDVSA thinks they can avoid seizure…and Russia or China paid in advance….

          That ain’t gonna fly. That oil is going nowhere.

    • As a builder (the “third party”), I am subject to liens placed on the property (the owners, or first party) when there is legal action against that owner. Once, a county sheriff showed up and confiscated my work-site trailer and all of my equipment in the owners half-built home. It was all sorted out quickly enough, but still, it was frustrating to learn that even MY property was subject to the whims of the legal system. My offense was simply having something of value on the defendants property.

      Lawyers are a pretty smart bunch. They know how to make it hurt, and they know who has the deep pockets. This, I imagine, is why all of these non-PdVSA entities have their undies in a twist.

      Moral of the story: Pay your debts.

    • Dammit Bill, can´t you separate your commentary into paragraphs? I enjoy your input very much, but it’s a pain in the ass to read when there are no pauses and sometimes not enough punctuation marks (remember what they taught us about “run-on sentences” in grammar school?). Thanks.

      • @ Fed Up. In my opinion the content of Bill’s posts is such that I am more than willing to overlook any punctuation errors. I , for one, greatly enjoy his insights into the whole situation. I’m perfect punctuation is just not something to get upset about. There are so many other things happening that are more worthy of our feelings of frustration.

      • Pretend Bill is as a partisan in an old WW2 movie, frantically tapping out his message on a suitcase transmitter, while the gestapo circles the neighborhood in their radio-direction-finding van.

        • Lol. Love those old b&w war movies. We always ended up kicking some Nazi ass. At least in the ones produced in the U.S.
          In the ones produced in Germany we probably got OUR ass kicked. Lol

    • If it’s spot chartered, why wouldn’t that oil still belong to PDVSA?

      As I interpret it, the only protection PDVSA has from seizure of the oil (not the tankers of course) if it can be proven that the cargo is sold and prepaid to a third party. Which is why PDVSA offers a discount for prepaid sales.

      • Ira because standard oil sale practice is for the oil to pass to the buyer upon it passing on board the vessel which is receiving it for transportation to its destination , documenting the transfer is a document known as a bill of lading issued by the master of the tanker which represents title over the oil , usually the bill of lading names the seller as shipper and the buyer as consignee……. Transfer of the oil does not require prepayment only application of standard industry practice which presumed ….spot charters differ from time charters in that in the former case the fuel used by the vessel belongs to the carrier while in the latter case the fuel used by the tanker is assummed to belong to the charterer …thats what makes the latter tankers subject to seizure , not the tanker irself but its fuel tanks on board the vessel.

  5. Whats worse: being a dirty vulture or being a dirty bastard that doesn’t pay your bills? I hate people who don’t pay their bills.

  6. I was wondering the same thing. How does trying to recover money legally loaned make someone a vulture?

  7. The free market works pretty well. Distressed goods sell at distressed prices for a reason. Vultures feed on carrion, meat of dead animals. Financial “vultures” take a huge/calculated risk that the distressed price they pay in the present will be sufficiently rewarded in an uncertain future, usually at great cost to the buyer, to justify the investment made. Venezuelan Govt./similar are forever decrying that the carrion mess they have made of Venezuela’s economy/PDVSA can be of interest to financial “vultures”.

  8. Sigh…guys, please, is there a grown-up lawyer in the room here? PDVSA is a corporation. PDVSA didn’t expropriate Conoco’s assets, Venezuela did. Conoco’s lawsuit won’t fly because PDVSA is a separate entity, period. There is legal precedent backing this view (Argentina, Griesa, etc.). Unfortunately, it is a bit more complicated than what the editor of La Patilla thinks. Sorry to burst your bubble.

    • Ahh, but win or lose, time is not on the side of PDVSA. The suits can take their sweet time while tankers swing on their moorings, running up fees by the day, and cash flow is disrupted. “Complicated,” is a lawyer’s friend.

      “Venezuela on Thursday rejected ConocoPhillips’s moves to seize the country’s Caribbean assets to collect on a $2 billion arbitration award, but in a sign the U.S. oil company’s pressure might be working, Caracas also suggested it was ready to pay.”

      https://www.reuters.com/article/us-conocophillips-pdvsa/venezuela-suggests-ready-to-pay-after-conoco-moves-on-its-caribbean-assets-idUSKBN1IB2XP

      Sorry to burst your bubble.

    • Problem is that when Pdvsa signed the joint venture agreement with Conoco it gave Conoco a hold harmless against discriminative govt actions affecting Conocos interest in the venture so that although you are absolutely right that what the govt did should not have affected Pdvsa because Pdvsa is not the Govt , thru the agreement Pdvsa assummed some of the govt liabilies in certain cases …….!! You are a logical man Venny but your practical knowledge of how oil deals are actually made is a bit off !! I simpathyze with you conceptually but logic has nothing to do with it……!!

      • The lines between PDVSA and the Venezuelan government are blurred to the point that any reasonable person would consider PDVSA to be a commercial enterprise of the Venezuelan government.
        This will play out as holders of defaulted government debt attempt to lien and seize PDVSA assets.
        Any separation between the two entities ended when the military assumed control of PDVSA. I am certain that the courts will rule that they are one and the same. This is important for holders of defaulted government debt. Many government assets are insulated from collection efforts. The US hedge fund that attempted to seize the Argentine sailing vessel comes to mind. The ship was considered a military asset and could not be seized by the creditors. If the ship was operated as a cruise ship, it would have been fair game.
        I am interested in seeing creditors go after the ill gotten gains of the regime’s inner circle. It was reported that Al-Assami has around $500,000,000 worth of assets frozen in the US. If it can be proven that his money came from PDVSA illegally, it could be argued that his frozen assets are PDVSA assets and therefore subject to seizure by creditors.
        There is a reason that some lawyers command very high fees They are knowledgeable, resourceful and persuasive. Eventually there will be a deluge of legal action as all of the unpaid contractors, suppliers and creditors stake their claims against the regime and PDVSA.

    • “PDVSA didn’t expropriate Conoco’s assets, Venezuela did.”

      Are you a lawyer?

      Let me fill you in on liens and the little I do know about the law. It doesn’t matter if PdVSA did or didn’t nationalize Conoco. What matters is PdVSA is an asset of Venezuela. Conoco is going after PdVSA for the same reason that thieves rob banks… “Because that is where the money is”

      Deep pockets and cast a wide net. That’s TORT LAW, Venny.

      • Thanks for all your comments. Again, the corporate veil would have to be pierced and there is precedent for that not to happen: Argentina and a ruling done by Griesa during sov default.

        If PDVSA wants to pay out of goodwill, then great. But that is a different story.

        • The coportate veil would have to be pierced if Pdvsa had not included a clause in its joint venture agreemnt ih Conoco engaging to compensate Conoco for certain govt measures affecting the interests of Conoco, thus making itself into a guarantor agaisnt the payment of damages caused by certain govt measures against Conoco . So in this case no piercing of the corporate veil is needed ….but there is an added problem for Pdvsa in that as regard to China its acting as the agent of the govt to ensure China recieves its supplies using crude which is owned by the govt as part of the royalty it receives from Pdvsa under Ven Law , so that those bls in Bonaire for example being blended to deliver them to chinese tankers actually belong to the govt and can be seized by its creditors …..Pdvsa and the govt are in a tight spot ,!! growing worse as there will be a host of other creditors taking action against both Pdvsa and the govt in coming months……..!! I dont celebrate this ocurring because it will make living conditions in Venezuela worse than they already are ……..but there must be some accounting for the regime bringing us to this terrible spot from their need for sheer chauvinistic posturing !!
          DONT YOU AGREE??

          • Bill: As an oil industry worker that regularly deals with Ven, I have to say that you are well versed in the matter.

            Will be interesting to see if PDVSA pays Conoco to get their assets unfrozen. Personally I don’t believe it will ever happen and is just another stalling tactic. Even if they did pay up, it probably would not make any difference, as Conoco has now exposed Ven/PDVSAs weak spot and I’m sure other creditors would try the same tactic.

  9. Mira, Bill – word I’m hearing from Ven. is that crude is being shipped right out of Jose which has a regular conga line of super tankers etc. waiting to take on fuel. What’s more, the Jose facility has limited ability to load tankers.

    Fill us in on Jose (it must be a total mess I imagine) since it seems (correct me if wrong) this is the last port PDVSA can use.

    • This was from 2013. Weisbrot states that in 2012, poverty went down 20% (~33 to 26-27 or so) in one year, and links to the World Bank to prove it. I recall at the time also seeing that big drop- and at the time dismissed it as a statistical artifact- especially since poverty jumped up in 2013. World Bank data no longer shows that drop ~2011-2012- though I recall that at one time it did. No poverty data past 2015- because the GOV didn’t supply it. Surprisingly … 🙂

      For those who NOW are distancing themselves from Socialism as practiced in Venezuela (conveniently forgetting Bernie’s “banana republic” crack from 2011) here is one from our friends at Telesur. Chavismo Will Be Socialist Or It Will Cease To Exist.

  10. No doubt PDVSA is in trouble but I think the more important discussion should be what should PDVSA look like in a post Chavista Venezuela. I suspect Venezuelans might prefer a return to a PDVSA run by professional oil people independent from the government. Which I gather was the model the Chavistas crushedBut I wonder if that model works in a Venezuela where oil remains the dominant portion of the economy and the pueblo want expensive social services. I just do not understand how you keep the politicians hands off of the honey pot if in fact Venezuelans prefer socialism. What should a post Chavista! PDVSA look like. It could be the subject of a commentary with various alternatives thrown out for discussion.

  11. Looks like Conoco Phillips is going to be able to gum up Venezuela’s oil exporting stream in a big way. Shutting down the refinery which supplies China is not a minor incident.

    May 11, 2018 / 10:27 AM / Updated 2 hours ago:Exclusive: PDVSA to shut Curacao refinery amid fight with Conoco – sources

    (Reuters) – Venezuela’s state-run oil company PDVSA is preparing to shut a Caribbean refinery that is running out of crude amid threats by ConocoPhillips to seize cargoes sent to resupply the facility, according to two sources with knowledge of the situation.

    Conoco of the United States last week began legal actions in the Caribbean to enforce a $2 billion arbitration award by the International Chamber of Commerce (ICC) over the 2007 nationalization of its projects in Venezuela. The moves have disrupted fuel deliveries throughout the Caribbean, much of which depends on PDVSA.

    The PDVSA-operated 335,000 barrel-per-day Isla refinery in Curacao, which has not received new shipments from PDVSA since last week, plans to exhaust existing inventories in the coming days, the two sources said.

    PDVSA did not reply to a request for comment.

    PDVSA is seeking ways to sidestep legal orders to hand over assets. The Venezuelan firm has transferred custody over the fuel produced at the refinery to the Curacao government, the owner of the facility, the sources said. In another legal move to avoid oil being seized, PDVSA transferred ownership of crude to be refined at Isla to its U.S. unit, Citgo Petroleum, one of the sources added.

    “The seizure in Curacao was enforced on Thursday, so the inventories’ custody was transferred. The refinery will eventually stop (operations),” the source said.

    PDVSA has told customers they must send their own ships to pick up oil cargoes in Venezuelan waters, rather than wait for it to deliver. That keeps PDVSA’s ships out of Conoco’s grasp.

    PDVSA, which was already struggling to export its oil amid falling output and a lack of maintenance, is looking for a place in Venezuelan waters to start transferring oil from small to larger tankers, which is typically done for large cargoes bound for Asian destinations.

    The country’s oil ports increasingly are snarled with vessels waiting to load for exports.

    More at the link.

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