As of Wednesday, over 80 tankers were anchored off the Venezuelan coast waiting to load about 22 million barrels of crude and products for export. Earlier in the month, the backlog hit 24 million barrels.
PDVSA exports down due to asset seizures, shipping backlog
Data from Venezuela’s state-run oil company shows PDVSA exports of crude dropped 32 per cent in the first half of June compared to May. According to a report by Reuters, PDVSA output is declining after some of the company’s Caribbean assets were seized, disrupting crude and fuel shipments.
The data shows PDVSA exports of crude amounted to 765,000 barrels per day (b/d) in the first two weeks of June. In May, 1.133 million b/d were exported. These numbers do not include cargoes of upgraded oil by two of PDVSA’s joint ventures, which are exported separately.
PDVSA has been struggling for years as mismanagement has resulted in a lack of money to pay for spare parts and equipment and a significant decline in production. Employees are also fleeing the South American country which has been crippled by hyperinflation and a severe recession.
As well, the court decision granting ConocoPhillips a $2 billion arbitration award against PDVSA has heavily impacted the company. The US producer seized a number of refining facilities in the Caribbean under the decision, leaving PDVSA with limited ability to honour its supply contracts, especially with Asian customers.
This month PDVSA has increased its loading of larger vessels which will allow its customers to receive bigger cargoes, according to the company data and Thomson Reuters vessel tracking data. PDVSA has also started seaborne transfers to reduce tanker congestion at the country’s main oil port of Jose.
But with access to its Caribbean ports used for shipping and storing oil reduced, the company is still mired in shipping delays. So far in 2018, the company has exported an average of 1.24 million b/d, 26 per cent below the 1.68 million b/d shipped in 2017.
And, as of Wednesday, over 80 tankers were anchored off the Venezuelan coast waiting to load about 22 million barrels of crude and products for export. Earlier in the month, the backlog hit 24 million barrels.
According to Reuters, this month, PDVSA asked its customers to not send tankers to lift crude exports until it had loaded the tankers that have been waiting for weeks at the country’s two main Venezuelan ports.
Only 36 per cent of deliveries of 550,000 b/d of Merey heavy crude and fuel oil to China National Petroleum Corporation, which is one of PDVSA’s largest creditors, have been completed this month.
Boscan crude shipments to Chevron hit 74 per cent of the contracted amount in the first two weeks of June. Crude and fuel shipments to Cuba met 67 per cent of its 97,000 b/d obligations.
According to Reuters, out of 360,000 b/d of Venezuelan crude earmarked for shipment to Indian refiners, no crude shipments were delivered during the first half of June. Reuters data does show that two large tankers carrying 3 million barrels combined have been shipped India this week.
Reliance and Nayara Energy, two of India’s refining companies, have at least two more deliveries pending in June. Large tankers dispatched by the refiners have been waiting at the Jose port for up to a month to load.
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