ConocoPhillips takes over Venezuelan Caribbean terminals as a result of judgment

Bloomberg/Fuel Fix:
ConocoPhillips may finish what U.S. sanctions started.

The Houston-based company on Friday assumed control of Venezuela's oil assets in the Caribbean island of Bonaire and filed court orders to do the same in Curacao and Aruba. The takeover is effectively stifling Petroleos de Venezuela SA's ability to export oil, the commodity that bankrolls the regime of President Nicolas Maduro.

The Caribbean terminals are logistically key to Venezuela's ability to export oil. About 16 percent of its crude exports are stored in those terminals before sailing to their final destination in the U.S., China and India.

The move by ConocoPhillips is part of an effort to fulfill a $2.04 billion arbitration ruling against PDVSA. The state-run oil company, for its part, is planning to pay the award but hasn't reached out to Conoco to discuss the details yet, according to a person with knowledge of the situation. PDVSA didn't immediately return email seeking comment.

"This is a total disaster" for Venezuela, says Francisco Monaldi, a fellow at Rice University's Baker Institute. "The Conoco situation, as it is, with PDVSA unable to use storage tanks in the Caribbean, is worse than the existing U.S. sanctions," he said in a phone interview from Houston.

Unable to use its network of tank farms, PDVSA is rerouting cargoes back to its ill-equipped ports in Venezuela, causing a logjam of tankers around the main sea terminals.

The company now has limited ability to load supertankers, the transportation mode of choice for buyers in China and India, which may force PDVSA to push more oil to U.S. refiners at deeper discounts, Monaldi said.
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Theft of other people's assets is having a negative effect on Venezuela.  As with most socialist, they have run out of other peoples money and have been called to account for their expropriation. 

Venezuela has also lost cases brought by other US oil companies which had helped to develop the industry in that country before they were taken over and run into the ground.  Socialism has impoverished a once rich country.  It is the outcome that can be expected when government greed runs rampant.

Comments

  1. Their currency is used for toilet paper, a year ago the government of Venezuela did not have the foreign currency they needed to pay the Colombian company that printed their new higher denomination bills.

    Even the Russians have cut them off, the Chinese, are refusing to take oil, as payment, or keep propping their government up. Venezuela foreign currency reserves are about to run out. Their in the same situation, as North Korea.

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