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Chevron has been given permission by the US government to
continue its operations in Venezuela for another quarter. The
exemption from oil sanctions given to Chevron and four other oil
service providers (Halliburton, Schlumberger, Baker Hughes and
Weatherford International) allows them to work in Venezuela until
January 22nd. However, they are banned from exporting diluents to
Venezuela which would allow the country to process its heavy crude.
Chevron has four joint ventures with PDVSA in Venezuela, whose
output can reach about 200,000 b/d of the total 700,000 b/d
currently produced in the country.
Meanwhile, Russia's state-owned oil giant Rosneft is understood
to be planning to take control of PDVSA. Having been one of the
biggest lenders to PDVSA, Rosneft has interests to secure that will
be paid back. Russia and Venezuela agreed two years ago on a debt
restructuring for USD 3.15 billion over a decade, with minimum
payments in the first six years. Payments have to be made twice a
year, in March and September, with no clarity on whether Venezuela
has paid so far this year. Handing control over to a foreign entity
would need to be approved by Venezuela's parliament, the National
Assembly, which is now under control of the opposition.
PDVSA controls the country's estimated 300 billion barrels of
oil, the largest crude reserves on the planet, which is mostly
heavy crude, nowadays considered less desirable. The amount of the
company's debt (USD 1.1 billion) doesn't justify the full transfer
of ownership. Meanwhile, Beijing doesn't seem to be interested in a
takeover.
Elsewhere, Brazil's state-owned oil company Petrobras clarified
that the oil polluting over 200 beaches in the country originates
from Venezuela. Having "analysed over 30 samples", they have
"concluded that it was crude oil from three Venezuelan fields",
Petrobras' officials said last week.
In terms of recent shipments and their destination, data by IHS Markit Commodities at Sea
suggests that activity observed so far this month (excluding ships
not sending any signals) has declined further, with liftings not
surpassing 400,000 b/d. India and China continue absorbing most of
these volumes, with a marginal increase to report on flows to
Europe (if currently reported destination proves accurate). It is
mainly Spain importing once again small cargoes from Venezuela.
Posted 31 October 2019 by Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade, IHS Markit
