Conoco moves to take over Venezuelan PDVSA

Conoco moves to take over Venezuelan PDVSA

HOUSTON (Reuters) – U.S. oil agency ConocoPhillips (COP.N) has moved to take Caribbean belongings of Venezuela’s state-run PDVSA to implement a $2 billion arbitration award over a decade-oil nationalization of its initiatives within the South American nation, in accordance to two sources acquainted with its actions.

FILE PHOTO: Logos of ConocoPhillips are seen in its sales space at Gastech, the world’s greatest expo for the gasoline trade, in Chiba, Japan, April four, 2017. REUTERS/Toru Hanai/File Photo

The U.S. agency focused services on the islands of Bonaire and St. Eustatius that play important roles in processing, storing and mixing PDVSA’s oil for export. It acquired court docket attachments that froze the belongings pending additional motion, one of many sources stated.

The attachments may additional impair PDVSA’s declining oil gross sales and the nation’s convulsing economic system. Cash-strapped Venezuela is sort of utterly depending on oil exports for income. It is within the grip of a deep recession with extreme shortages of drugs and meals in addition to a rising exodus of its individuals.

PDVSA and the Venezuelan international ministry didn’t reply on Sunday to requests for remark. Dutch authorities stated they’re assessing the scenario on Bonaire.

“Any potential impacts on communities are the result of PDVSA’s illegal expropriation of our assets and its decision to ignore the judgment of the ICC tribunal,” Conoco stated in an e-mail to Reuters.

The U.S agency added it can work with the group and native authorities to tackle points which will come up because of enforcement actions. Conoco declined to elaborate on its court docket actions.

PDVSA has vital belongings within the Caribbean. On Bonaire, PDVSA owns the 10-million-barrel BOPEC terminal that has been important to its logistics and gas shipments to prospects, notably in Asia.

On the island of St. Eustatius, it rents storage tanks on the Statia terminal, owned by U.S. NuStar Energy (NS.N).

Over four million barrels of Venezuelan crude have been retained in Statia following the court docket order, in accordance to one of many sources. The San Antonio Texas-based agency didn’t reply to a request for remark.

PDVSA additionally operates the 335,000-barrel-per-day Isla refinery and Bullenbay oil terminal on Curacao, its principal Caribbean services for processing, mixing and delivery crude. In Aruba, PDVSA and its unit Citgo lease a refinery and a storage terminal.

PDVSA on Friday ordered its oil tankers crusing throughout the Caribbean to return to Venezuela to keep away from court docket motion, one of many sources stated. Several cargoes of Venezuelan crude have been retained or seized in recent times over unpaid freight charges and associated money owed.

“This is terrible (for PDVSA),” stated a supply acquainted with the court docket order of attachment. The state-run firm “cannot comply with all the committed volume for exports” and the Conoco motion imperils its skill to ship gas oil to China or entry inventories to be exported from Bonaire.

Conoco had sought up to $22 billion from PDVSA for damaged contracts and lack of future income from two oil producing joint ventures, which have been nationalized in 2007 underneath late Venezuela President Hugo Chavez. The U.S. agency left the nation after it couldn’t attain a deal to convert its initiatives into joint ventures managed by PDVSA.

Reporting by Marianna Parraga and Gary McWilliams; Additional reporting by Brian Ellsworth in Caracas,; Editing by Sandra Maler

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