Latin America

Misery Seen From Space Too Much for This Venezuela Bonds Fan

21 Mar 2017   Venezuela

There are plenty of reasons why BlueBay Asset Management LLP cut its holding in Venezuelan bonds, from the empty shelves in the supermarkets of Caracas to a nationwide dearth of spare auto parts. But few were more compelling than the satellite photograph of Puerto Cabello on the Caribbean coast, home to the country’s biggest port, which shows a once-vibrant terminal bereft of vessels. “If you can see a country’s economic decline from space, you know it’s in big trouble,” said Graham Stock, the head of emerging-market sovereign research in London at BlueBay, which reduced its holdings of the nation’s debt to below-benchmark levels. He estimates Venezuela’s imports have declined by as much as 50 percent in the last two years. The investment company that manages $50 billion dismissed warning signs last year about Venezuela’s ailing economy and bought the country’s dollar debt, which returned about 50 percent in 2016, […]

PDVSA Said to Replace Refining Managers as Shakeup Deepens

21 Mar 2017   Venezuela

Venezuela’s state oil company is replacing high-level managers at refining complexes and other divisions as it deepens a shake-up that began in January, according to people with knowledge of the situation. Managers at several of Petroleos de Venezuela SA’s major refineries have been replaced in the past weeks, Ivan Freites, a union leader, said Monday in a telephone interview. Widespread staffing changes across PDVSA, as the company is known, were confirmed by another person who works with PDVSA but isn’t authorized to speak about the matter publicly. Officials at the company’s press office and energy ministry declined to comment. The managerial changes come months after Venezuelan President Nicolas Maduro added two board members and installed new executives at PDVSA, including a rear admiral. In January, Maduro gave the job of oil minister — a position that was formerly held by PDVSA President Eulogio Del Pino — to Nelson Martinez, […]

Exclusive: Venezuela’s cash-strapped PDVSA offers Rosneft oil stake

17 Mar 2017   Venezuela

Venezuelan state oil company PDVSA has offered Russian counterpart Rosneft a stake in a joint venture in the country’s Orinoco Belt extra-heavy crude area, five industry sources said, in a sign of the Latin American nation’s dire economic situation and Moscow’s growing muscle there. Rosneft ( ROSN.MM ), Russia’s top oil producer, has been offered a 10 percent stake in the Petropiar joint venture. PDVSA [PDVSA.UL] has a 70 percent share, and U.S. oil company Chevron Corp ( CVX.N ) holds 30 percent of the venture, which includes an oil field and a 210,000 barrel-per-day oil upgrader. Two sources said the offer was part of a larger package put to Rosneft as PDVSA seeks to raise money for major debts with providers and bond payments. It is unclear […]

Crucial Loans to Venezuela Are Held Up by Dispute With Congress

16 Mar 2017   Venezuela

The bitter political standoff between Venezuela’s government and opposition may have cost the crisis-torn country nearly half a billion dollars in loans from one of its last active multilateral lenders as a fourth year of recession grips the economy. The Development Bank of Latin America, or CAF, is said to be reconsidering whether to issue fresh loans to Venezuela — a principal member and home to its headquarters — due to a legal dispute between the National Assembly and the Supreme Court, according to three people with direct knowledge of the matter. As the government struggles to stock store shelves and make good on billions of dollars in bond payments, the opposition-controlled legislature has refused to approve a debt financing law for 2017.

Insisting that the National Assembly is in contempt, President Nicolas Maduro has sought budgetary approval from the Supreme Court, which he’s packed with his supporters. In response, Maduro’s opponents in the legislature have sent a stern warning: Any new debt approved without the Congress would be considered illegal and future governments would not be obligated to honor it.   With the world’s highest sovereign risk of default, Venezuela, which has depended on loans from China in recent years for liquidity, is finding it harder and harder to obtain financing as reserves tumble and debt service becomes more burdensome.

Venezuela threatens to seize bakeries amid bread shortage

16 Mar 2017   Venezuela

Venezuela’s government has threatened to seize control of bakeries that fail to implement regulations to combat bread shortages. President Nicolas Maduro said the government will expropriate industrial bakeries , which he blames for a “bread war” that has resulted in shortages of bread throughout the country. “They’re going to pay, I swear. Those responsible for the bread war are going to pay and they better not complain that it was a political persecution,” he said on Sunday, according to the BBC . He added “speculators who hide the bread from the people will face the weight of the law.” […]

Petrobras Cleared to Proceed With Asset Sales

16 Mar 2017   Brazil

Brazil’s federal auditing court overturned a preliminary ruling Wednesday that had frozen asset sales by Petróleo Brasileiro SA since December, removing a major roadblock to the state-run oil company’s plan to reduce its massive debt load. The court, known as the TCU, said in a statement late Wednesday that Petrobras had presented documentation showing that “risks” in the company’s divestment program had been…

Could Rosneft Take Control Of Citgo?

16 Mar 2017   Russia, USA, Venezuela

Rosneft could take control of 49.9 percent of Citgo – the troubled U.S. business of Venezuela’s state-owned oil company, media are warning. PDVSA used the stake as collateral for a $1.5-billion loan provided by Rosneft last year, and the Russian company immediately filed a lien with the Delaware Department of State asserting its right to ownership in case PDVSA defaults on debt payments. Now, the possibility of a default has become more pronounced, spurring speculation about what might happen should this possibility turn into a certainty. The loan deal itself sparked protests in the U.S. energy industry, with ConocoPhillips and a Canadian miner, Crystallex, asking the federal court in Delaware to cancel the lien, even though the use of stock as collateral in loan agreements is standard practice. This time, however, there are geopolitical implications weighing in, and it’s these implications that will, in all likelihood, make the idea […]

Venezuela Alleges Fraud in $1.3 Billion Oil-Rig Lease

15 Mar 2017   Venezuela

The Venezuelan government is investigating alleged corruption in a $1.3 billion contract between the state oil company and a private contractor co-founded by a Saudi prince, according to law-enforcement officials and related documents. Venezuela’s inspector general’s office on March 6 recommended that the Public Prosecutor’s Office investigate and charge five current and former executives at Petróleos de Venezuela SA, or PdVSA, for allegedly embezzling public funds by paying inflated fees for the lease…

Holy Vaca Muerta! There Is Life Beyond The Permian

9 Mar 2017   Argentina

Industry heavy-hitters reveal their top assets outside of the prolific Permian Basin during a CERAWeek by IHS Markit discussion in Houston. Before “Permania” reignited the oil and gas industry’s lust for acreage, the Permian Basin was a hit or miss bet. And for Houston Energy LP, it was a miss that sent the company offshore. Ronald Neal, co-founder and co-owner of the private exploration and production (E&P) company, said that in 2007, Houston Energy was still onshore, and had invested in the Howard County hold of the Permian Basin during 2007. “In hindsight, I think I know what Moses felt like,” Neal told a gathering at CERAWeek by IHS Markit in Houston. “Moses wandered around the Middle East for 40 years, and he stopped in the one part of real estate that didn’t have oil. We did that as well. We bought acreage in the only part of the […]

Is This Argentinian Shale Play The Next Permian?

9 Mar 2017   Argentina

Having inked a $300 million investment deal with the Argentinian YPF, Shell reiterated its claim to join the ranks of the various oil & gas majors engaged in tapping the plentiful shale resources of the Vaca Muerta (“Dead Cow”) formation in Neuquén Province. Competitors abound – ExxonMobil, Chevron, BP (Pan American Energy), Total, Petrobras, Wintershall and others all stand to consolidate their hold on Latin America’s largest shale development, with reserves of 8.7 TCm of gas and 16 bn barrels of oil. After the discovery of several large-scale fields between 2010 and 2012, Vaca Muerta came to be known as a top-potential project that simply took too long to develop. The ultimate root cause of the delays can be traced back to the complex system of relations between the Argentinian state and companies operating within its territory. YPF controls approximately half of the Vaca Muerta acreage and after its […]

Colombia’s Oil Sector Faces ‘Post-Conflict’ Security Problems

8 Mar 2017   Colombia

Colombia’s oil industry continues to face bombings and other security challenges even after last year’s peace deal that ended a long-running guerrilla conflict, a top Colombian oil official said Tuesday. The government signed a deal in November with the Revolutionary Armed Forces of Colombia, or FARC, to end more than a half-century of conflict that claimed at least 220,000 lives and displaced more than 5 million people. The…

Oil-for-loan debts cost Venezuela’s PDVSA hard-won India market share

8 Mar 2017   Venezuela

Venezuela’s state-run oil company, PDVSA, has spent at least a decade trying to build business ties and boost shipments to refineries in India, where crowds once welcomed the late socialist leader Hugo Chavez with cries of “Viva!” Now, the ailing firm is being forced to slash sales to its crucial trade partner. Venezuela has given up the fight for coveted market share in India because of a combination of declining crude production and heavy obligations under oil-for-loan deals with China and Russia, according to internal PDVSA data and two people familiar with the company’s strategy and operations. (For a graphic on PDVSA’s falling market share in India click ) Caracas needs the oil to pay debts to China and Russia, key political allies that have together lent […]

Brazilian crude threatens Oceania, Middle East suppliers’ Asian market share

8 Mar 2017   Brazil

China’s strong appetite for Brazilian crude has set off alarm bells among various producers in Oceania and the Middle East, prompting Australian and key Persian Gulf crude suppliers to slash their selling prices in an effort to remain competitive and protect their market share in Asia, market participants said Wednesday. Since late 2016, China saw a dramatic increase in Brazilian crude imports and the trend remained firmly intact with two Chinese state-run oil companies purchasing 5 million barrels or more of heavy sweet crude from the South American state for loading in March, according to a source with direct knowledge of the deals. March shipping fixtures seen by S&P Global Platts also showed that PetroChina has fixed the San Jacinto to move 130,000 mt of crude oil for March loading from Brazil to China, while trading company Vitol also booked Suez Hans and Fraternity to move a combined 260,000 […]

Total teams up with Brazil’s Petrobras

2 Mar 2017   Brazil

French energy company Total announced alongside its Brazilian counterpart, Petrobras, both sides were teaming up in a $2.25 billion joint venture agreement. “These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualizing our operational excellence and further reducing costs on our joint projects for the benefit of both companies,” Total CEO Patrick Pouyanne and Petrbras CEO Pedro Parente said in a joint statement . Total’s payments to Petrobras include $1.6 billion in cash. The Brazilian company, known formally as Petroleo Brasileiro, handed over enough of a stake in some of its more lucrative fields so that Total is a minority partner. The Brazilian company said the joint venture agreement with Total aligns with a five-year plan to improve its financials […]

Colombia Rebel Group Wages Oil Pipeline War as Another Disarms

2 Mar 2017   Colombia

Colombia’s smaller rebel group has unleashed a wave of attacks on the country’s No. 2 oil pipeline, a show of strength amid peace talks that’s creating a headache for companies including Ecopetrol SA and Occidental Petroleum Corp. There have been 17 attacks this year on the Cano Limon pipeline in eastern Colombia where the National Liberation Army, or ELN by its Spanish initials, is highly active, compared to seven attacks in the first two months of last year, according to state-controlled Ecopetrol. That’s forcing some oil companies to store crude in tanks, rather than transport it to the Caribbean port of Covenas from where it’s shipped to buyers. Pumping through the pipeline has been halted since Feb. 15, forcing Ecopetrol to declare force majeure on certain exports, according to people familiar with the situation. Drillers may have to halt production at fields in the area if the pipeline isn’t […]

Colombia’s Ecopetrol reports 14% year-on-year decline in proven reserves

22 Feb 2017   Colombia

State-controlled Ecopetrol reported a 14% year-on-year reduction in proven reserves through December 31, a decrease that reflects three years of declining oil field investment in Colombia’s oil patch, it said Tuesday. Ecopetrol pegged year-end 1P reserves at 1.598 billion barrels, down 14% from 1.849 billion barrels at the end of 2015. The reserves were calculated using US Securities and Exchange Commission-approved standards by independent firms Ryder Scott Co. and DeGolyer & MacNaughton. Ecoptrol said the decrease was due to the “pronounced fall in oil prices” in 2016 that made a significant percentage of the company’s previously reported reserves uneconomical to produce. Ecopetrol accounts for more than three quarters of Colombia’s crude and natural gas reserves and output. The SEC price used to value Ecopetrol’s reserves in 2016 was $44.49/b, down from $55.57/b in 2015, a 20% decline. Ecopetrol estimated that the price decrease was responsible for the loss of […]

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 […]