Latin America

Venezuela deputy president defies US over drug sanction

15 Feb 2017   Venezuela

Tareck el-Aissami (L) was supported by President Maduro (R) on Tuesday The vice-president of Venezuela has accused the US of “imperialist aggression” after it slapped sanctions on him for allegedly trafficking drugs. Tareck el-Aissami was described by the US treasury as a drug “kingpin” who worked with traffickers in Mexico and Colombia to ship drugs to America. Hitting back, he accused the US of “defamatory aggression”. Venezuelan President Nicolas Maduro demanded a public apology from the US for sanctioning his new deputy. The sanctions freeze Mr Aissami’s assets in the US and bar him from entering the country. He is seen as a powerful figure within the governing party and has been entrusted by Mr Maduro with key powers normally held by the president, such as determining ministerial budgets and expropriating private companies. The US treasury accuses him of being in the pay of convicted Venezuelan drug lord Walid […]

US labels Venezuelan vice-president a drug kingpin

14 Feb 2017   Venezuela

The Trump administration has frozen millions of dollars in assets belonging to Tareck El Aissami, as it labelled Venezuela’s powerful vice-president an international drug trafficker. The US Treasury designated Mr El Aissami a drug kingpin for allegedly “playing a significant role in international narcotics trafficking”. The move came just one month after embattled Venezuelan president Nicolás Maduro tapped the former governor of Aragua state as his deputy and potential successor. Mr El Aissami has long denied any criminal ties. US officials said Mr El Aissami had facilitated multiple 1-tonne narcotic shipments to Mexico and the US from Venezuela. The Treasury also designated Samark López Bello — an international businessman described as his “primary frontman” — for acting on Mr El Aissami’s behalf. It also moved to block a 13-company network linked to Mr Lopez Bello or others in the US, the UK, Venezuela, Panama and the British Virgin Islands. John Smith, head of the Treasury’s Office of Foreign Assets Control, said the action was the “culmination of a multiyear investigation”. In the Miami area alone, the US froze real estate linked to Mr El Aissami that “can be measured in the tens of millions of dollars”, according to a US official. Frozen assets linked to Mr López Bello included waterfront property in Miami and a Gulfstream aircraft.

Venezuela falls behind on oil-for-loan deals with China, Russia

10 Feb 2017   Venezuela

Venezuela’s state-run oil company, PDVSA, has fallen months behind on shipments of crude and fuel under oil-for-loan deals with China and Russia, according to internal company documents reviewed by Reuters. The delayed shipments to such crucial political allies and trading partners – which together have extended Venezuela at least $55 billion (£43.9 billion) in credit – provide new insight into PDVSA’s operational failures and their crippling impact on the country’s unraveling socialist economy. Because oil accounts for almost all of Venezuela’s export revenue, PDVSA’s crisis extends to a citizenry suffering through triple-digit inflation and food shortages reminiscent of the waning days of the Soviet Union. ADVERTISING The total worth of the late cargoes to state-run Chinese and Russian firms is about $750 million, according to a […]

Latin America Growing More Dependent On U.S. Oil

8 Feb 2017   Latin America

Crude production has slowed in parts of Latin America as oil majors struggle to pump for profits. Mexico and other Latin American countries have been relying more heavily on the United States for petroleum imports for several months now, which has led to an interesting trend. For the first time since 1993, the U.S. has a trade surplus in petroleum with Mexico. The monthly average for this past November had U.S. net exports with Mexico at over 300,000 barrels of oil per day. The average for the fourth week in January was over 2,728,000 barrels per day. The surplus grew substantially in less than three months. This is due to the fact that Mexico is unable to produce as much at these OPEC inflated oil prices. (Click to enlarge) On top of this, Mexico has an immense demand for refined petroleum but lacks refinery capacity. As a result, they […]

Maduro maintains oil supplies to Cuba despite Venezuelan shortages

7 Feb 2017   Cuba, Venezuela

The price of oil is half of what Venezuela needs to feed its citizens, who for the most part do not manage to eat them three times a day, but the regime of Nicolás Maduro continues to supply fuel faithfully to Cuba although it does not receive dollars for the barrels sent to the island, publishes  El Nuevo Herald .  “For Maduro is a priority, and we know from different sources, keep the volume to Cuba. They are not sparing their efforts to meet that goal and are doing everything they can to maintain that commitment to Havana, “former PDVSA manager Petróleos de Venezuela said from Miami.
It is a commitment that subtracts funds that are urgently needed to import food in Venezuela, where only 3 percent of the population is eating three times a day and 52 percent say they only eat once, according to recent surveys that illustrate The magnitude of the crisis in that country.

Data provided by oil expert Jorge Piñón, based on official PDVSA figures, show that the South American country supplies Cuba with the equivalent of 87,000 barrels per day of oil and derivatives with an estimated value of $ 1.467 million.  By 2016, it is estimated that the volume of crude shipped decreased slightly to the island in the midst of the severe Venezuelan crisis and the gradual fall in production in the country, but conservative estimates put the total crude oil and products close to 70,000 barrels a day Said Piñón, director of the University of Texas Energy Program in Latin America and the Caribbean.

PDVSA Braces for Oil Production Drop as Default Looms Large

2 Feb 2017   Venezuela

The recent bump in oil prices isn’t enough to help Petroleos de Venezuela SA as it faces its fourth consecutive year of declining production. The company’s crude output is expected to fall this year as it failed to raise cash for investments and after Venezuela agreed to cut 95,000 barrels a day for six months as part of a deal struck by the Organization of Petroleum Exporting Countries and other non-members to lift oil prices, analysts say. Even the recent increase in oil prices, following the cuts, aren’t enough to ease the company’s financial burden, Lucas Aristizabal, a senior director at Fitch Ratings, said. “Giving the tight liquidity, prices need to be significantly higher to revive output,” Aristizabal said in a phone interview from New York. “At least more than $100 to start with,” he said. Fitch reiterates that a default of PDVSA’s debt is “probable” amid lower production […]

Venezuelan Credit Dashboard: Default Risk Falls Below 50%

2 Feb 2017   Venezuela

Traders reduced their bets on a default of Venezuela’s dollar debt over the next year amid a thin repayment schedule in the first quarter. The implied probability of nonpayment over the next 12 months plunged to 44 percent in January from 59 percent at the end of December, according to credit-default swaps data compiled by Bloomberg. That’s the first time the risk of default has been below 50 percent since September. The longer-term outlook is still a little murky, with the odds of a credit event over the next five years at 89 percent. January proved to be a volatile month in Venezuelan politics as President Nicolas Maduro reshuffled his cabinet, named and delegated wide-ranging powers to a new vice president, replaced the head of the central bank and appointed a new board at state oil company Petroleos de Venezuela SA . That happened as officials continue to face […]

Cuba oil potential estimate revised higher

2 Feb 2017   Cuba

Cuba-focused Melbana Energy said it more the doubled its reserve estimates for onshore oil, though recovery rates there are low so far. Melbana is one of the few Western oil companies, and the only one listed on the Australian exchange, with a footprint in Cuba. In a statement on its reserve estimates, CEO Peter Stickland said the 612 million barrels of prospective oil in its Block 9 onshore area was “extraordinary.” “Significantly, these leads have the potential for billions of barrels of oil-in-place however the prospective resources so far assume only the historical 5 percent recovery factor from offset fields in Cuba,” he said. “The application of modern enhanced oil recovery techniques may increase the recovery factor and therefore has the […]

Lured by discounts, U.S. East Coast refiners snatch up Brazilian crude

1 Feb 2017   Brazil

The Philadelphia Energy Solutions oil refinery owned by The Carlyle Group is seen at sunset in Philadelphia March 26, 2014. Picture taken March 26, 2014. U.S. East Coast refiners are on a Brazilian crude buying spree, market sources say, displacing West African cargoes as producers such as Royal Dutch Shell and Norway’s Statoil sell rising output from fields off Brazil’s coast. The uptick in Brazilian imports into the region comes as the only Latin America producer to increase output in recent years seeks markets close to home for the oil it is pumping from the massive offshore subsalt oilfields under development. February deliveries of Brazilian crude into the U.S. East Coast are expected to hit 2.4 million barrels, or 86,000 barrels-per-day, the highest monthly volume since at least 2009, according to the U.S. Energy Information Administration and Reuters shipping data. The strong February numbers follow a surge in Brazilian […]

Venezuela’s Maduro seen bolstering grip on PDVSA after shake-up

31 Jan 2017   Venezuela

An oilfield worker walks next to pipelines at PDVSA’s Jose Antonio Anzoategui industrial complex in the state of Anzoategui, Venezuela, April 15, 2015. REUTERS/Carlos Garcia Rawlins/File Photo PDVSA’s new senior executive line-up includes a Venezuelan navy rear-admiral, Hugo Chavez’s former Twitter manager and a leader of the late leftist president’s failed 1992 coup. The selections, announced as part of a sweeping executive shakeup of Venezuela’s struggling state oil company on Sunday, suggest former President Chavez’s unpopular successor Nicolas Maduro is strengthening his grip on the enterprise that powers the OPEC country’s economy. Maduro said the overhaul was aimed at stamping out corruption at the company that oversees the world’s biggest oil reserves and has been linked to major bribery cases in the United States. PDVSA [PDVSA.UL] President Eulogio Del Pino, a Stanford-educated engineer, was kept on, but most of his top executives, several with long oil careers, were removed. […]

Venezuela Names New Leaders At Oil Firm PDVSA To ‘Defeat Corruption’

31 Jan 2017   Venezuela

Venezuela’s president creates an executive vice president post and names new vice presidents to lead PDVSA in what he described as a shake-up of the state oil company. CARACAS, Jan 29 (Reuters) – Venezuela’s president on Sunday created an executive vice president post and named new vice presidents to lead PDVSA in what he described as a shake-up of the state oil company and an effort to root out corruption in the OPEC nation’s principal industry. Venezuelan President Nicolas Maduro kept Eulogio Del Pino as PDVSA president but created a new post of executive vice president while naming vice presidents in areas including finance and exploration. PDVSA has been dogged for years by corruption ranging from lucrative smuggling of heavily subsidized fuel to kickbacks and bribery that led to prosecution of U.S.-based contractors who did business with the company. “We have to clean out the corruption that has incubated […]

Exclusive: Millions of barrels of Venezuelan oil stuck at sea in dirty tankers

27 Jan 2017   Venezuela

More than 4 million barrels of Venezuelan crude and fuels are sitting in tankers anchored in the Caribbean sea, unable to reach their final destination because state-run PDVSA cannot pay for hull cleaning, inspections, and other port services, according to internal documents and Reuters data. About a dozen tankers are being held back because the hulls have been soiled by crude, stemming from several oil leaks in the last year at key ports of Bajo Grande and Jose, which has resulted in delayed operations for loading and discharging. Since debt-laden PDVSA cannot afford to have the ships cleaned, they have to wait for weeks to navigate international waters, delaying shipments. Dirty tankers are the latest of a litany of problems weighing on PDVSA, the source of most of […]

Tankers: Panama Canal delays reduced but still averaging three-six days

26 Jan 2017   Panama

The waiting time for non-booked Panamax-class vessels on the Panama Canal is about six days, a Panama Canal Authority manager said Wednesday. “Neopanamax slots are almost 100% sold for the next two weeks so any Neopanamax vessel that arrives without a booking slot confirmed may have to wait several days for transit,” said the manager, from the canal authority’s Traffic Management and Admeasurement Section. The Panama Canal Authority was “allocating all resources” to bring the backlog back to normal levels, he added. “Regular vessels” face delays of three days, the manager added. Regular ships are defined as those under 91 feet in beam, according to agency Wilford & McKay. The transit delays are down from January 17 when all non-booked vessels were facing average delays of seven to eight days. A return to a normal backlog was expected to take several days as it is highly dependent on the […]

Bombings halted pumping at Colombia’s Cano-Limon oil pipeline

23 Jan 2017   Colombia

Bomb attacks last week halted pumping operations along Colombia’s second most important oil pipeline, the Cano-Limon Covenas, state oil company Ecopetrol said on Sunday. The company did not say who was responsible for the attacks but military sources said it was the leftist National Liberation Army (ELN) rebels. Production and exports were not interrupted, Ecopetrol said. The seven attacks occurred last week in a rural area of northern Norte de Santander and Arauca provinces, close to the border with Venezuela. The 485-mile (780 km) pipeline has the capacity to transport up to 210,000 barrels of crude daily from oil fields operated by U.S.-based Occidental Petroleum to the Caribbean port of Covenas. There were 43 attacks on the pipeline last year, Ecopetrol said. Attacks on oil installations by the ELN, a group of about 1,500 combatants, have been a frequent occurrence during a conflict that has taken more than 220,000 […]

Socialism, Not Oil, Is The Cause Of Venezuela’s Problems

21 Jan 2017   Venezuela

Venezuela’s economy has collapsed. Unfortunately, most people mistakenly believe Venezuela’s policies created a successful economy prior to the collapse in oil prices. The truth is that Venezuela’s socialist policies held back its economy during the oil boom and are the direct cause of its economic collapse today. Upon Hugo Chavez death in 2013, and before the collapse in oil prices, Salon published an article titled “Hugo Chavez’s Economic Miracle” that praised the success of his brand of socialism. Salon was far from alone. Numerous left-leaning pundits and celebrities, and even some very influential economists, have held up Venezuela as a rare example of a successful socialist economy. For example, in a 2007 speech sponsored by the Bank of Venezuela, Joseph Stiglitz — 2001 recipient of the Nobel Prize in Economic Sciences and former senior vice president and chief economist of the World Bank — claimed that “Venezuela’s economic growth […]

Exclusive: Brazil plans two subsalt auctions in 2017, another in 2018

20 Jan 2017   Brazil

A man works at the Cidade Angra dos Reis offshore platform at the Lula oil field, about 300 km (186.4 miles) from the coast of Rio de Janeiro, February 16, 2011. Brazil plans to hold two subsalt oil auctions in 2017, putting new exploration areas up for bidding in November for what should be the “most competitive” round of the year, Oil Secretary Marcio Felix said in an interview on Thursday. The auctions, an effort to lure foreign investment in a sector that for much of the past decade was the object of protectionist policies in Brazil, will be the first since 2013 for the offshore region known as the subsalt, where giant discoveries were made starting about a decade ago. The first auction, expected in the first half of this year, will offer areas next to existing discoveries already in development, Felix said. The November auction will be […]

Operations at Venezuelan oil terminal halted by spill: sources

18 Jan 2017   Venezuela

Shipping operations at one of three docks of Venezuela’s main crude exporting port were halted after an oil spill occurred while loading a vessel bound for India, union and shipping sources told Reuters on Tuesday. The spill, which happened over the weekend at Jose port’s Eastern dock and whose size has not yet been disclosed, also affected other tankers close to the very large crude carrier (VLCC) Nave Quasar, chartered by India’s Reliance Industries, the sources said. “The tanker had loaded 10,000 barrels less than agreed so when trying to reconnect the crude line to fill the missing volume, the pressure was too high, breaking the end of the hose and spilling crude directly to the sea,” one of the sources said. Venezuelan state oil company PDVSA, which operates the terminal, did not immediately respond to a request for comment. Jose is Venezuela’s largest crude port. Most crude shipments […]

Venezuela’s Maduro on Trump: ‘He Won’t Be Worse Than Obama’

18 Jan 2017   Venezuela

Incoming U.S. President Donald Trump may have an unexpected ally: Venezuela’s socialist and much-criticized President Nicolas Maduro. Just days ahead of the inauguration in Washington, Maduro said he was taking a wait-and-see, but hopeful, stance toward the incoming president, while slamming the record of outgoing President Barack Obama. “There’s been a brutal hate campaign against Trump all over the world,” Maduro said late Monday at a news conference with OPEC Secretary-General Mohammad Barkindo in Caracas. “I say let’s wait and see. All I’ll say is that he won’t be worse than Obama.” Venezuela, the South American country with the world’s largest crude reserves, has long had an acrimonious relationship with the U.S., the biggest buyer of its oil. Late President Hugo Chavez famously once called former President George W. Bush “the devil” at a speech before the United Nations General Assembly. Tensions flared up again […]

Venezuela Issues New Bank Notes Because of Hyperinflation

17 Jan 2017   Venezuela

Venezuela ’s government began to issue new bank notes on Monday to replace the 100-bolívar bill, made virtually worthless by hyperinflation. President Nicolás Maduro announced early last month that new notes would be issued to replace the old ones, a measure that promised to lighten the load for many Venezuelans, who must carry around bags of cash for even the simplest transactions.

Venezuela debuts new banknotes amid soaring inflation

17 Jan 2017   Venezuela

Venezuelans are standing in long ATM lines to take out new, larger-denominated bills that President Nicolas Maduro hopes will help stabilize the crisis-wracked economy. Maduro last month said he was scrapping circulation of the most-used 100-bolivar note and replacing it with new bills ranging from 500 to 20,000 bolivars. Residents in Caracas expressed shock at seeing bills with so many zeros. But triple-digit inflation has destroyed many families’ purchasing power and even the largest of the new bills is worth less than $6 on the black market. Also on Monday, the government plans to inaugurate special foreign exchange houses near the border to stamp out the black market and attract badly needed hard currency from Colombian shoppers who frequently cross into Venezuela for bargain-hunting.

Venezuela will circulate new proposal next week to support oil prices

16 Jan 2017   OPEC, Venezuela

Venezuela’s President Nicolas Maduro holds speaks during his annual report of the state of the nation at the Supreme Court in Caracas, Venezuela January 15, 2017. REUTERS/Carlos Garcia Rawlins Venezuela will next week circulate a new proposal to crude producers in a bid to support oil prices, President Nicolas Maduro said on Sunday, without providing details. The Organization of the Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million barrels per day to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed to by independent producers such as Russia, Oman and Mexico. “Venezuela, as of next week, will circulate a letter with a new proposal, a new formula for the stability of real and just prices so that it can be studied and debated by all the governments that have signed this deal,” Maduro said in […]

Exclusive: Venezuela’s PDVSA sees 2017 oil output stuck near historic lows – document

14 Jan 2017   Venezuela

The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas, Venezuela January 11, 2017. REUTERS/Marco Bello Venezuelan state energy company PDVSA projects oil production will remain near 23-year lows in 2017, an internal document shows, suggesting more hardship ahead for the crisis-wrought OPEC member country. Cash-squeezed PDVSA, which accounts for nearly all of Venezuela’s export revenues and is the socialist government’s financial motor, saw production tumble by nearly 10 percent in 2016 due to an unraveling economy and low oil prices. The company’s weak finances are causing operational disruptions, and are both affected by and contributing to Venezuela’s economic downturn. Three years of recession and soaring prices have pummeled Venezuelans, with many skipping meals and lootings of supermarkets commonplace. Some economists have estimated that gross domestic product contracted by 10 percent or more in 2016. This year, PDVSA sees production at 2.501 […]

Exxon Mobil discovers new oil reservoir offshore Guyana

13 Jan 2017   Guyana

Exxon Mobil Corp said on Thursday drilling results from a third exploration well offshore Guyana showed a new reservoir containing 100-150 million barrels of oil equivalent. The discovery at the Stabroek block is off a border region that is claimed by Venezuela in a territorial controversy dating back more than a century, even though the area functions in practice as Guyanese territory. The Payara field discovery is about 10 miles (16 km) northwest of Exxon’s 1.4-billion barrel Liza oil discovery. The exploration project is led by Exxon, with Hess Corp and an unit of CNOOC Ltd also holding stakes. (Reporting by Swetha Gopinath in Bengaluru; Editing by Shounak Dasgupta)

Venezuela arrests opposition lawmaker and critical general

13 Jan 2017   Venezuela

Venezuelan officials jailed a second opposition figure Thursday as tensions mounted in the economically struggling South American country. Officials re-arrested former Gen. Raul Baduel, saying he had been conspiring to overthrow the government. Baduel was once a high-ranking member of the administration of late President Hugo Chavez, but later became critical of the socialist party. Baduel was freed from prison in 2015 after serving six years on corruption charges. On Wednesday, officials arrested substitute lawmaker Gilber Caro from a hardline opposition party on weapons charges. The arrests come as a fledgling “anti-coup” unit inside the government targets what it calls renewed opposition attempts to destabilize the country. Human rights groups said the arrests go against the government’s recent freeing of several jailed activists as part of Vatican-sponsored mediation effort. The opposition is asking the government to free dozens of prisoners widely considered […]

Argentina strikes $15bn a year shale investment deal

11 Jan 2017   Argentina

President Mauricio Macri is pushing to revamp flagging production at Argentina’s massive shale reserves, with companies agreeing on Tuesday to invest as much as $15bn a year in exchange for lower labour costs and extended state subsidies. The drive to increase investment and productivity in the Vaca Muerta shale deposit in Patagonia, which boasts the second-largest reserves of shale gas in the world, is part of Argentina ’s attempt to recover energy self-sufficiency and emulate the shale boom in the US. Mr Macri proclaimed a “new era” for the country’s languishing energy sector, which will see foreign companies including Chevron , Dow , BP , Shell and Total, as well as Argentina’s state energy company YPF , invest an initial $5bn in 2017, rising to $15bn in subsequent years. Although once a net exporter of energy, a lack of investment in recent years has seen production plummet, leaving Argentina […]

Argentina clinches deal to attract investment in Vaca Muerta shale

11 Jan 2017   Argentina

Argentina has clinched a deal with labor unions and energy companies aimed at luring investors to the Vaca Muerta formation in Patagonia, one of the largest shale reserves in the world, the government said on Tuesday. Vaca Muerta has attracted investment from Chevron Corp and Exxon Mobil Corp. But the formation, which is about the size of Belgium, remains mostly unexplored, largely due to high production costs and a lack of labor flexibility, oil major executives have said. As part of the pact, Argentina will offer a subsidized price of $7.50 per million British thermal units of natural gas produced at new wells through 2020. The price, which is more than double that of front-month natural gas futures on the New York Mercantile Exchange, is […]

Venezuela’s Oil Company Sued Over Latest Citgo Deal

7 Jan 2017   Venezuela

Petróleos de Venezuela SA is facing new legal action from North American multinationals over financial maneuvers they say are designed to shield the state-owned oil giant’s U.S. assets from seizure. Canadian mining company Crystallex International Corp. on Wednesday expanded an existing lawsuit in Delaware federal court against PdVSA, as the struggling national company is known. At issue is a loan transaction that PdVSA quietly undertook last month with Rosneft Trading SA, an affiliate of Russia’s state-owned oil company that was also named as a defendant. Lawyers for U.S. oil producer ConocoPhillips , another plaintiff suing PdVSA, also said on Wednesday that it would seek relief from the court. The two companies are seeking large awards from Venezuela in international arbitration tribunals over nationalizations carried out under the nation’s deceased president, Hugo Chávez. PdVSA, the major economic engine in recession-ravaged Venezuela, has drawn the companies’ ire by taking steps they […]

Venezuelan Leader Nicolás Maduro Shakes Up Cabinet

5 Jan 2017   Venezuela

President Nicolás Maduro reshuffled his cabinet Wednesday amid a deepening recession, appointing a state governor to the vice presidency and naming his sixth new economy minister in three years. In a surprise televised address, Mr. Maduro named Tarek El Aissami, governor of the central Aragua state, as his deputy. The governor takes the vice presidency amid a push by the opposition to oust Mr. Maduro through a recall referendum, which polls show the highly unpopular president would likely lose if it were to take place. Mr. El Aissami would assume the presidency if a referendum takes place and Mr. Maduro were to lose, although the proposed vote is tied up in courts amid government allegations that the opposition used fraudulent signatures in its petition. “Socialism is the way to cure the fatherland,” Mr. […]

Venezuelan Credit Dashboard: Next Big Payment Due in April

4 Jan 2017   Venezuela

Venezuela looks set to start 2017 with a somewhat quiet first quarter in terms of debt repayment, with only $1.1 billion due over the first three months of the year. A majority of that — $726 million — has to be paid back in February. The next big test is set for April, when nearly $3 billion comes due, and the market will be watching for any sign that might signal if either the government or state owned oil company PDVSA will attempt to try another swap operation to push out maturities. With the central government issuing new dollar debt for the first time since 2011 in late December, investors will be looking to see how the $5 billion of new notes are used. Despite promises of surprise announcements by President Nicolas Maduro, 2016 ended without any any significant changes to […]

Divestment streak for Petrobras continues

30 Dec 2016   Brazil

Brazil’s state-run oil company said it closed on the sale of a refinery on the Japanese island of Okinawa as its divestment streak continues. State-run Petroleo Brasileiro, known informally as Petrobras, said it closed on the 100 percent sale of its refinery to Japan’s Taiyo Oil Co. for $165 million. Taiyo gains a refinery with a processing capacity of 100,000 barrels per day and a storage capacity of 9.5 million barrels. “The operation was recorded in the partnerships and divestments program that reached $13.6 billion on the 2015-2016 period,” the Brazilian company said in a statement. “The sale is aligned with the Petrobras’ strategic plan, which aims to optimize the business portfolio.” The sale of its Japanese refinery comes one week after French supermajor Total gained access to two of Brazil’s largest oil fields in a $2.2 billion deal with Petrobras. The deal […]

Venezuela president extends date to use 100-bolivar bills

30 Dec 2016   Venezuela

President Nicolas Maduro has again extended the deadline for Venezuelans to stop using their old 100-bolivar bills. Maduro said in a television and radio broadcast address on Thursday that people now have until Jan. 20 to stop using the old bills. The decision comes almost two weeks after violent protests and looting erupted when an earlier date to stop using the old bills came and went before new bills to replace them were distributed. Government officials have blamed “sabotage” for the ongoing delay in the distribution of the new bills. Venezuela faces a severe economic crisis that includes galloping inflation and shortages of food, medicine and other goods.

Venezuela’s President Once Again Extends 100-Bolivar Note’s Deadline

30 Dec 2016   Venezuela

Venezuelan President Nicolás Maduro announced the extension for the 100-bolivar notes during a television program… CARACAS, Venezuela—President Nicolás Maduro has again extended the deadline for Venezuelans to stop using their old 100-bolivar bills, the second time Mr. Maduro has delayed plans to withdraw the nation’s most widely used bank note. Mr. Maduro said in a television and radio broadcast address on Thursday that people have until Jan. 20 to stop using the old bills. The decision comes almost two weeks after violent protests and looting erupted when an earlier date to stop using the old bills came and went before new bills to replace them were distributed. At that time, Mr. Maduro extended the note’s use to Jan. 2. Government officials have blamed “sabotage” for the continuing delay in the distribution of the new bills. Venezuela faces a severe economic crisis that includes galloping inflation and shortages of food, […]

U.S. Refiners Open Export Spigot to Meet Latin American Need

30 Dec 2016   Latin America, USA

U.S. refiners exported record amounts of oil products last week, taking market share from struggling competitors in Mexico and the Caribbean. Almost 4 million barrels a day of gasoline, distillates like diesel and heating oil, and propane left the country as refiners in Texas and Louisiana processed the most crude in at least 24 years. Demand has grown this year as competitors in Latin America sputtered out with maintenance issues, Andy Lipow, president of Lipow Oil Associates LLC, said by phone from Houston. “The high exports are due to the poor refinery operations that we’re seeing in Mexico and Venezuela, creating a demand for record amount of exports off the Gulf Coast,” Lipow said. Combined gasoline and distillate exports surpassed 2.5 million barrels a day last week, the most in government data dating back to 2010. Gasoline exports, which have more than doubled since August, have topped 1 million […]

In Venezuela, lynchings kill one person every three days: report

29 Dec 2016   Venezuela

Roughly one person is being lynched in crisis-ridden Venezuela every three days as frustrated residents take revenge on suspected criminals, a monitoring group said on Wednesday. The Venezuelan Observatory of Violence (OVV), which monitors crime, said mob killings have become a generalized phenomenon across the country, with 126 deaths reported in 2016 versus 20 last year. “Due to being repeated victims of crime for more than a decade, and the feeling of not being protected, many people have decided to take justice into their own hands,” the OVV said in its latest annual report. In the past, it said, lynchings […]

Cuba says economy shrank this year in tandem with Venezuela crisis

28 Dec 2016   Cuba, Venezuela

Containers are seen at the Mariel port in Artemisa province, Cuba January 5, 2016. Cuba’s economy shrank 0.9 percent this year in tandem with the crisis in its key trading partner Venezuela, President Raul Castro told the National Assembly on Tuesday in a closed-door speech, predicting a slightly brighter outlook for 2017. The figure suggests the economy contracted sharply in the second half after the cash-strapped government drastically cut imports, investment and fuel in response to lower exports and a drop in cheap oil deliveries from Venezuela. It had reported 1 percent growth for the first half. “Restrictions in cash and in the provision of fuel worsened in the second half,” Castro said, according to excerpts published by official media outlet Cubadebate. “Financial tensions and challenges that might intensify again in certain circumstances will persist, but we hope that gross domestic product will grow moderately, by around 2 percent […]

Venezuela says to cut 95,000 bpd crude output in OPEC deal

28 Dec 2016   Venezuela

Venezuela said on Tuesday it will cut 95,000 barrels-per-day of oil production in the New Year in fulfillment of a producers’ deal to reduce global output and strengthen prices. Jan. 1 is the official start of the pact by the Organization of the Petroleum Exporting Countries and several non-OPEC producers to lower production by almost 1.8 million bpd. “Without prejudicing its international contractual obligations, from Jan. 1 2017, (state oil company) PDVSA and/or its subsidiaries will implement a reduction in the volumes of its main crude sale contracts, all in conformity with existing terms and conditions,” the Energy Ministry said. Venezuela, a price hawk within OPEC and one of the nations worst affected by the fall in crude revenue since mid-2014, currently produces just over 2.4 million […]

Venezuela is lurching closer and closer to chaos

27 Dec 2016   Venezuela

VENEZUELA, WHICH was once Latin America’s richest country, has become an unwilling test site for how much economic and social stress a modern nation can tolerate before it descends into pure anarchy. This month its 31 million people lurched a big step closer to that breaking point, thanks to another senseless decree by its autocratic populist government. For years Venezuelans have struggled with mounting shortages of food, medicine and other consumer goods, as well as triple-digit inflation that has rendered the national currency, the bolivar, worthless. By this month the 100-bolivar bill, the largest note in circulation, was worth only 2 cents, forcing people to carry piles of them in order to make the most rudimentary purchases. Then came this coup: On Dec. 11, President Nicolás Maduro, an economically illiterate former bus driver, […]

Total nabs Brazilian pre-salt in Petrobras deal

23 Dec 2016   Brazil, France

French energy company Total said it was building up its prospects in South America in a partnership that gives it access to some of Brazil’s biggest oil fields. In a deal valued at $2.2 billion, the French supermajor gained access to two of Brazil’s largest oil fields in an acquisition of interests from state-supported Petroleo Brasileiro, known more commonly as Petrobras. Both sides already work together on assets in the U.S. waters of the Gulf of Mexico and in the giant Libra oil field off the coast of Brazil in the so-called Santos basin. Total gets a tighter hold over the prolific Santos basin, while Petrobas has the option to take on more interest in deepwater exploration off the coast of Mexico. “These agreements will reinforce Total’s position in Brazil through access to outstanding pre-salt resources,” Total Chairman and CEO Patrick Pouyanne said in […]

THE WORST IS YET TO COME! Crisis Group anticipates rising discontent and social upheaval in 2017

23 Dec 2016   Venezuela

The non-governmental organization The International Crisis Group warns in a report that Venezuela could enter a dangerous period of great turmoil after the worsening economic catastrophe and the decision of the government of Nicolás Maduro to prevent any type of electoral process in the country, publishes Sumarium  Given this scenario, the organization anticipates an increase in discontent and social upheaval after the failure of the dialogue process between the government and the opposition sponsored by the Vatican and asserts that “to restore the rule of law and avoid further suffering, an agreement with The opposition is essential and can only be achieved with international aid. ”  “With two years of his mandate still remaining … President Maduro and his ministers seem unable to prevent the economic collapse and an even deeper humanitarian crisis,” the report reads.  Also, he predicts that Nicolás Maduro will complete his mandate would have to pay a very high social cost, as the process of sharp economic contraction started in 2014 shows no signs of stopping and the country continues to increase its rate of inflation.

Secrecy And Confusion Surround Venezuela’s Latest Oil Deals

22 Dec 2016   Venezuela

Venezuela’s newly created and military run oil and mining company Camimpeg has formed a joint venture with UK-based Southern Procurement Services (SPS) to reactivate shut-in wells in Lake Maracaibo in Zulia state. The deal has raised eyebrows, given its scale and the relative inexperience of the parties involved. A source with knowledge of developments and who has operations in the lake told NewsBase the well count could approach 1,500. Given their lack of experience, questions have been asked about whether the JV partners have the requisite personnel or capital to pull off the work. Indeed, the fact the companies have even been allowed to team up is startling. SPS and Camimpeg, which was created in February to protect petroleum installations belonging to state-run PDVSA, recently formed Camimpeg-SPS to “improve the oil and gas production process for PDVSA,” the JV tweeted last week. In the most recent of only three […]

Venezuela Deploys Troops After Weekend Riots

21 Dec 2016   Venezuela

A member of the Venezuelan army stands in front of commercial properties after looting erupted… PUERTO ORDAZ, Venezuela—President Nicolás Maduro’s government deployed 3,000 troops to the southeastern state of Bolivar on Monday after people desperate over the government’s elimination of much of the country’s currency looted stores and homes over the weekend. The unrest took an especially heavy toll on Chinese immigrants, who own many of the grocery stores in the capital, Ciudad Bolívar, and nearby towns. “Everything was left in ruin,” said Juan Carlos Ho, standing next to the China Cham supermarket in the town of Sifontes, which had been left gutted. “They took the stands, the carts, all of the merchandise, which was a lot, and the air conditioners.” China, a key economic ally, on Monday called on Venezuela to protect Chinese immigrants and their property. “China is very concerned about the development of the situation in […]

Venezuela’s Maduro to tour oil-producing nations

20 Dec 2016   Venezuela

Venezuela’s President Nicolas Maduro speaks during a meeting with ministers at Miraflores Palace in Caracas, Venezuela December 17, 2016. Miraflores Palace/Handout via Venezuelan President Nicolas Maduro said he would soon embark on a tour of oil-producing nations to support the Organization of the Petroleum Exporting Countries’ recent agreement to shore up prices with an output cut. “We reached an historic accord,” Maduro said late on Sunday. “In the next few days, I will go to the oil nations and leave everything ready for a consensus formula for market stability and the fixing of prices for the next 10 years.” Maduro, whose nation is a price hawk and has been one of the worst affected by the fall in crude revenue since mid-2014, gave no further details of his agenda or plans. OPEC, of which Venezuela is a member, last month finalized a plan to cut output by about 1.20 […]

More hydrocarbons found in Gulf of Mexico

20 Dec 2016   Colombia

A Colombian energy company said it was involved in a new oil discovery in the U.S. waters of the Gulf of Mexico, its fifth so far. A U.S. subsidiary of Colombian energy company Ecopetrol owns a minority stake in the Warrior exploration well. Anadarko Petroleum, which has offices in Houston, is the operator of the well. The Colombian company said drilling ran through a 210-foot column of oil in the Warrior well, confirming it as a discovery. Ecopetrol CEO Juan Carlos Echevery said the discovery ends the year on a high note for a company looking to build up its reserves. “This achievement evidences Ecopetrol’s ability to strengthen its presence in one of the most prospective areas in the world as is the Gulf of Mexico,” he said in a statement . Warrior is the fifth regional discovery for the Colombian energy company since […]

More hydrocarbons found in Gulf of Mexico

17 Dec 2016   Colombia

A Colombian energy company said it was involved in a new oil discovery in the U.S. waters of the Gulf of Mexico, its fifth so far. A U.S. subsidiary of Colombian energy company Ecopetrol owns a minority stake in the Warrior exploration well. Anadarko Petroleum, which has offices in Houston, is the operator of the well. The Colombian company said drilling ran through a 210-foot column of oil in the Warrior well, confirming it as a discovery. Ecopetrol CEO Juan Carlos Echevery said the discovery ends the year on a high note for a company looking to build up its reserves. “This achievement evidences Ecopetrol’s ability to strengthen its presence in one of the most prospective areas in the world as is the Gulf of Mexico,” he said in a statement . Warrior is the fifth regional discovery for the Colombian energy company since […]

Venezuelans Protest Over Worthless Cash

17 Dec 2016   Venezuela

MARACAIBO, Venezuela—Desperate and cashless Venezuelans, angry that the government hasn’t exchanged their voided bank notes as officials had pledged, on Friday rose up in protest with some scattered looting of stores. National Guard troops were deployed to put down the unrest that broke out as far west as this large city near the Colombian border and in smaller towns in the east. With only nine days to go before Christmas, Venezuelans grappling with a collapsing economy and soaring inflation are left without money after President Nicolás Maduro in a sudden move this week banned the 100-bolivar note, the country’s largest denomination. Only the Central Bank now accepts the remaining bills—and only until Tuesday. “Maduro is making a mockery of the people, and he has destroyed Christmas for all Venezuelans,” said Desiré Chávez, a 33-year-old clothing vendor in Maracaibo who had accepted the 100-bolivar notes until Thursday. “Now I don’t […]

Petróleo Brasileiro Signs Financing Deal with China Development Bank

17 Dec 2016   Brazil, China

Brazil’s state-controlled oil company Petróleo Brasileiro SA said Friday it signed a $5 billion financing deal with the China Development Bank, the latest example of a troubled Latin American issuer reaching to deep-pocketed Chinese institutions for help. The 10-year financing arrangement coincided with the signing of a commercial contract whereby Petrobras, as the energy company is known, will supply 100,000 barrels of oil a day to three Chinese firms. The firms are China National United Oil Corporation, China Zhenhua Oil Co. Ltd. e Chemchina Petrochemical Co. Ltd. This comes as Petrobras, the most indebted oil major in the world with $123 billion of gross debt, looks increasingly unlikely to meet its target of selling $15.1 billion of assets by the end of the year following a number of legal challenges. Brazil’s federal […]

Venezuela’s 100-bolivar note withdrawal causes chaos

17 Dec 2016   Venezuela

Venezuela’s highest denomination banknote has ceased to be legal tender, in a move that has caused cash chaos and long queues at banks this week. Some cash machines on Thursday were still issuing the old 100-bolivar notes, hours before they expired. President Nicolas Maduro said new higher-denomination bills would be fully distributed in January. He has closed the borders with Brazil and Colombia until Sunday to stop “mafias” hoarding the currency abroad. Venezuelans have been seen lining up outside banks after they were given 72 hours to exchange the 100-bolivar note for new larger denomination notes and coins. The 100-bolivar note is worth just two US cents on the black market. Some people on Thursday still received the 100-bolivar notes when they withdrew money at ATMs, then immediately had to queue up again to re-deposit the soon-to-expire notes. “I don’t get the joke,” office worker Yarelis Carrero, who lives […]

Threat of hyperinflation haunts Venezuela

16 Dec 2016   Venezuela

Long queues continued to form outside banks across the Venezuelan capital Caracas on the day President Nicolás Maduro was set to do away with smaller denomination bank notes, amid mounting evidence the country had entered a dangerous hyperinflation spiral.  The embattled president shocked Venezuela four days ago when he announced plans to scrap the 100 bolívar bill that makes up about half of all the country’s currency, but which has become increasingly worthless in an economy where annual inflation is forecast to top 1,600 per cent next year.  The plan, which the government insists is necessary to fight currency hoarders and counter an “economic war”, is to replace the old money with new high denomination notes, including 10,000 and 20,000 bolívar bills, but as of Thursday they had yet to come into circulation.

Cuba and Venezuela’s Ties of Solidarity Fray

15 Dec 2016   Cuba, Venezuela

Fidel Castro and Hugo Chávez proclaimed a decade ago that they presided over a single country, combining Cuba’s educated workforce with Venezuela’s oil wealth to challenge U.S. power across Latin America. Now Mr. Castro is gone , three years after Mr. Chávez’s death, and the union between their two countries, while still strong on paper, is withering away fast. Daily shipments of more than 100,000 barrels of subsidized Venezuelan oil, the lifeblood of Cuba’s economy, have dropped by more than half since 2013, according to oil traders and Cuban refinery workers. In November, Cuba had to buy oil on the open market for the first time in 12 years, because of Venezuela’s plummeting output. Meanwhile, thousands of Cuban doctors who toiled in Venezuelan shantytowns to pay off the oil deliveries are quietly returning […]

Venezuelans Rush to Banks to Exchange Bills During Crackdown on Contraband

14 Dec 2016   Venezuela

Venezuelans desperately rushed to banks Tuesday to dump cash after the government announced it is eliminating the largest bank note in circulation to combat contraband in a country whipsawed by the world’s deepest recession and highest inflation. In the financial district of downtown Caracas, National Guard troops toting assault rifles stood outside banks as crowds of people lined up to deposit stacks of 100-bolivar bills that President Nicolás Maduro said Monday would become void on Wednesday. In the provinces, which have fewer banks, the situation was chaotic, with sporadic fighting breaking out among residents waiting as early as 5 a.m. in lines that stretched up to four blocks. The 100-bolivar bills is worth just 3 U.S. cents on the black market. “I’m fainting here, from heat and from rage,” said Yesenia Delgado, a 33- […]