Thursday, January 31, 2019

Venezuela proposes new oil contract terms to sidestep U.S. sanctions

By Marianna Parraga

(Reuters) - Venezuela's state-run oil company PDVSA is seeking to sidestep Trump administration sanctions restricting payments for its oil by asking major buyers, including U.S. refiners, to renegotiate contracts, four sources involved in the talks said.

The U.S. government issued an executive order on Monday freezing PDVSA assets and requiring U.S. firms to pay for PDVSA oil using accounts controlled by the country's congress head and self-proclaimed president Juan Guaido. The sanctions were aimed at pressuring socialist President Nicolas Maduro into stepping down. 

PDVSA began calling customers ahead of the sanctions, urging them to swap foreign fuel and other products for its Venezuelan crude cargoes, the sources said. It is also considering asking trading houses to act as intermediaries for a portion of its oil sales to indirectly supply customers in the United States and elsewhere. 

"We are trying to redo the contracts. It is not yet entirely clear how because customers are being individually called, but we are studying alternatives," said a PDVSA source familiar with the efforts.
It was unclear on Tuesday whether the approach of using intermediaries or swaps would avoid violating U.S. sanctions, the sources said. 

Oil accounts for more than 90 percent of Venezuela's export revenue. Falling output, corruption and mismanagement have battered the nation's economy, leading to hyperinflation and malnutrition that have prompted some 3 million people to leave the country. 

The South American country exports 1.25 million barrels per day (bpd) of crude, including 500,000 bpd to the United States, and imports over 200,000 bpd of refined products, according to Refinitiv Eikon data. The imports from the United States are crucial for Venezuela's production of diluted crude oil (DCO), as they use heavy naphtha to dilute Venezuela's extra heavy crude and produce oil ready for export.

Industry traders on Tuesday said that U.S. refineries were making inquiries to replace those shipments from other countries. World oil futures rose by more than 2 percent on Tuesday, but the market has not seen panicked buying as a result of the U.S. decision to target Venezuela's oil output, particularly as the country's production was already near seven-decade lows.


Washington said on Monday proceeds from PDVSA's sales to companies in the United States will be frozen until a new government can take control of the accounts. 

The sanctions did not directly mention swaps and indirect trade with PDVSA that began in recent years with customers including PDVSA's U.S. unit Citgo Petroleum, India's Reliance and Russia's Rosneft.

Oil firms that had sent tankers to Venezuela to lift crude bound for the United States were ordered by PDVSA on Monday to pay for cargoes before departure, sources told Reuters.

But such prepayment could violate the sanctions, setting the stage for a standoff at Venezuelan ports. Regular buyers of Venezuelan crude, especially in the United States, have started hunting for alternative supplies of heavy oil, a difficult task as other Latin American exporters from Mexico to Colombia do not have surplus capacity. 

PDVSA did not immediately reply to a request for comment.

Several U.S. refiners, including Chevron Corp, Phillips 66 and Valero Energy said they were studying the sanctions and would comply with U.S. laws.

Valero, the second-largest buyer of Venezuelan crude after Citgo, said it will "re-optimize" its crude supply. 

Washington's fast action on Venezuela and efforts by Maduro's government to defend its grip on PDVSA have sent shockwaves around the world, triggering angry responses from China and Russia.

Swaps and three-way trades have become routine due to PDVSA's oil-for-loan pacts and U.S. sanctions first imposed in 2017, according to internal PDVSA documents and trading sources.

The Caracas-based company's barrels typically go through several hands before reaching a refinery. Its fuel imports mostly come from swaps, according to PDVSA's internal documents and Refinitiv Eikon data.

PDVSA approached an Indian refiner seeking to modify terms of its contracts, including adding partial payment in the form of refined products through swaps, a source from the refining company said.

With other customers, payments in medicines or food for settling outstanding balances also are on the table, one of the PDVSA sources said.

India's Reliance and Nayara Energy, partially owned by Rosneft, did not respond to emails requesting comment.
Swaps are one response to U.S. sanctions, but dealing with traders for triangulating Venezuelan oil sales could be PDVSA's last resort as intermediaries make a profit from buying cheap barrels, storing them and then offering them to refiners.

"Traders buy our oil at obscene prices," the PDVSA source said.

(Reporting by Marianna Parraga in Mexico City; Editing by Rosalba O'Brien and Frances Kerry)

Venezuela’s Guaido leaps from back-bench to center stage

Juan Guaido
FILE - In this Jan. 5, 2019 file photo, incoming congressional president Juan Guaido, left, takes a selfie photo with his wife Fabiana Rosales and his daughter Miranda Guaido upon arrival to swear in the new board of the National Assembly in Caracas, Venezuela. Guaido stunned Venezuelans on Wednesday, Jan. 23, 2019 by declaring himself interim president before cheering supporters in Venezuela’s capital, buoyed by massive anti-government protests. (AP Photo/Fernando Llano, File)

CARACAS, Venezuela (AP) — The rise of Juan Guaido from back-bench obscurity to the U.S-backed, self-declared interim president of Venezuela in just three weeks has been meteoric - and by his own recognition risky.

Few Venezuelans had even heard of the fresh-faced, 35-year-old lawmaker when he was plucked from anonymity and named as president of the opposition-controlled National Assembly in early January. The move set up a high-stakes standoff with President Nicolas Maduro, who is increasingly seen as a dictator both at home and abroad.

Instead of backing down, Guaido stunned Venezuelans on Wednesday by declaring himself interim president before cheering supporters in Venezuela’s capital, buoyed by massive anti-government protests. And support from President Donald Trump, Canada and numerous Latin American countries, along with the Organization of American States, immediately rolled in.

But even as he was symbolically sworn in, he foretold of dangers, telling supporters: “We know that this will have consequences.” Moments later he slipped away to an unknown location amid speculation he would soon be arrested.

Last week, Venezuela’s feared SEBIN intelligence police pulled Guaido from his vehicle as he headed to a town hall meeting and briefly detained him. And the rival constitutional assembly controlled by Maduro’s allies threatened Guaido and others with an investigation for treason.
Key to Guaido’s rise to prominence has been timing - and behind-the-scenes backing.

As Venezuela’s economic crisis deepens, with masses fleeing the country to escape runaway inflation on pace to surpass 23 million percent, many are desperate for a new leader to rescue the once-wealthy oil nation. Into that void stepped Guaido.

An industrial engineer who cut his political teeth in a student protest movement a decade ago, he was elected to the National Assembly in 2015, and in its first session this year was named its leader.

At the time, Maduro made light of his newcomer status, feigning confusion over whether his name was “Guaido” or “Guaire,” a notoriously polluted river that runs through Caracas.

But following Wednesday’s presidential self-declaration, and a U.S. led chorus of Western hemisphere nations backing his challenge, Maduro responded with fury, swiftly cutting off diplomatic relations with the United States and giving American diplomats 72 hours to leave the country.

The architect of Guaido’s meteoric rise is Leopoldo Lopez, Venezuela’s most popular opposition leader, who is muzzled under house arrest and considered by government opponents to be a political prisoner.

At a time when many had written off the National Assembly, which was stripped of its last bit of power after the government set up the rival constitutional assembly in 2017, Lopez maneuvered behind the scenes for his Popular Will party to assume the presidency of the gutted legislature.

He then tapped Guaido, serving his first full term as a lawmaker, who rose to the helm of their party in Venezuela after eight more senior politicians sitting on Popular Will’s national board were exiled since 2014.

Guaido has been a loyal acolyte of Lopez for years, standing beside him at a 2014 news conference when the activist announced a strategy of anti-Maduro unrest. What was called “The Exit” bitterly divided the opposition because it came less than a year into Maduro’s presidency, when support for his rule was still strong.

The two talk a half dozen times each day, and not a single speech or move isn’t coordinated with Lopez first, said one ally, who spoke on the condition of anonymity because they were not authorized to discuss the internal proceedings.

Luis Vicente Leon, head of the Caracas-based polling firm Datanalisis, said that Guaido was so unknown that he hadn’t even measured Guaido’s approval ratings, like he does numerous other politicians. But he plans to start doing so this week.

Critics say Guaido lacks a political vision, pointing to his rambling debut speech as the legislature’s president, which was full of rhetorical barbs aimed at the “usurper” Maduro but short on specifics on how to get out of the malaise.

Still, others see his youth and relative inexperience as breathing life into the beaten-down opposition, making Maduro’s frequent diatribes that it is dominated by elitist relics from Venezuela’s pre-revolutionary past harder to stick.

Guaido told The Associated Press in a recent interview he doesn’t fear running into the same fate as his political allies. He pointed to scars on his neck caused by rubber bullets fired during 2017 street demonstrations against Maduro.

“I still have projectiles lodged here,” he said.

Guaido has endured hardships for much of his life. At age 15, shortly after Maduro’s mentor, the late Hugo Chavez, assumed the presidency and ushered in a socialist overhaul, Guaido and his family survived a torrential mudslide that killed thousands and left many more homeless in the port city of La Guaira, a short distance from Caracas and home to the capital’s airport.

“We are survivors,” he said. “If they take Juan Guaido prisoner, someone else will emerge, because our generation won’t give up.”

Like Lopez, the wiry Guaido prides himself an athlete and is a devotee of his hometown’s Sharks — a perennial loser in the Venezuelan baseball league. He and his wife, a fellow activist, have a daughter named for Francisco de Miranda, a precursor to Venezuelan independence hero Simon Bolivar.

While in congress, Guaido earned a reputation as a hard worker and consensus-builder while serving as the head of the comptroller commission that investigates allegations of government corruption.
Now he is drawing attention on the international stage.

U.S. President Donald Trump promised to use the “full weight” of the U.S. economic and diplomatic power to push for the restoration of Venezuela’s democracy.

But for the frontal assault on Maduro’s authority to succeed, Venezuelans fearful of taking to the streets again after past uprisings ended in violent crackdowns and bitter divisions must be prepared to risk it all again.
On Wednesday, they responded to Guaido’s call by gathering in the tens of thousands in Caracas waving flags and chanting “Get out Maduro!” in what was the largest demonstration since a wave of unrest that left more than 120 dead in 2017.

While the protests were mostly peaceful there were no signs that security forces heeded Guaido’s call to join the anti-Maduro movement and go light on demonstrators. His supporters say the constitution gives him the authority to declare himself interim presidency as head of the National Assembly.

“The constitution gives me the legitimacy to carry out the charge of the presidency over the country to call elections,” Guaido said last week. “But I need backing from the citizens to make it a reality.”
Associated Press writer Joshua Goodman contributed to this report.
Fabiola Sanchez on Twitter:
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Wednesday, January 30, 2019

Russia claims no knowledge of plane sent to Venezuela 'to extract 20 tonnes of gold' from national bank

Allegations that a Russian jet which landed in Caracas was due to load an $840 million portion of the country's gold reserves surfaced early on Wednesday 
  Allegations that a Russian jet which landed in Caracas was due to load an $840 million portion of the country's gold reserves surfaced early on Wednesday Credit:  REUTERS/ANDRES MARTINEZ CASARES

Russian authorities have moved to quash suspicions that 20 tonnes of gold are about to be moved from the Venezuela’s national bank to Moscow.

Allegations that a Russian jet which landed in Caracas was due to load an $840 million portion of the country's gold reserves surfaced early on Wednesday.

Venezuela’s opposition-controlled parliament, sidelined by the Maduro regime, said in a tweet that they received information from the Bank of Venezuela that a plane from Moscow arrived to Caracas to “extract at least 20 tons of gold” - 20 per cent of the bank’s holdings.

“We are demanding the Bank [to reveal] details of what is happening. That gold does not belong to Calixto Ortega, [head of the Bank]. It belongs to the Venezuelan people,” the tweet read.

Dmitry Peskov, Kremlin spokesman, said on Wednesday that he is not aware of any plans to bring gold to Moscow.

“Russia is prepared to help resolve the political situation [in Venezuela] in any way possible, without interfering into the country’s internal affairs,” Mr Peskov was quoted as saying by the RBC news outlet.

On Monday, Russian newspaper Novaya Gazeta reported that an empty passenger plane departed from Moscow to Caracas.

The Boeing 777, with space for some 400 passengers and belonging to Russia's Nordwind Airlines, was parked by a private corner of the airport after flying direct from Moscow, according to flight tracking data and Reuters photos.

It was the first time it had made the route, the data showed.

Novaya Gazeta said that the plane carried two crew teams and suggested there was no obvious reason for it to fly there: Russian tourists are officially recommended not to visit Venezuela, sales of package tours to the country have stopped long ago, and Russia’s Foreign Ministry hasn’t announced plans to evacuate Russian citizens from the country.

Venezuelan social media was alive with theories, including that the place had brought mercenaries, or was there to escort Maduro into exile.

Venezuela's Finance Minister Simon Zerpa claimed there were no Russian planes in the Caracas airport, despite the pictures.

Responding to questions about the gold, Peskov urged journalists "to be careful with different hoaxes."

Maduro claims he is facing a Washington-backed coup attempt led by opposition leader Juan Guaido, who last week proclaimed himself president and was recognized by the United States as the legitimate head-of-state.

Russia has accused US President Donald Trump's administration of trying to usurp power in Venezuela and warned against any military intervention. The Kremlin on Tuesday condemned new U.S. sanctions against Venezuela's vital oil sector as illegal interference in the OPEC member's affairs.

Russia’s Foreign Minister Sergei Lavrov said on Tuesday that Russian government “will do anything” to support Maduro.

Guaido is currently petitioning the Bank of England to prevent Mr Maduro getting his hands on $1.3 billion (£1 billion) in gold held in London vaults. Venezuela, which is struggling to provide basic services, has some $8 billion in foreign reserves around the world.

On Monday the US placed sanctions on Venezuela’s state oil company – a move designed to cripple Maduro’s regime financially, and sway the military to defect.

Tuesday, January 29, 2019

Venezuela’s Choking Points: Here’s Where Maduro Gets His Revenue

Venezuela’s Choking Points: Here’s Where Maduro Gets His Revenue 

 Venezuela’s Choking Points: Here’s Where Maduro Gets His Revenue

Venezuela’s Choking Points: Here’s Where Maduro Gets His Revenue 
Venezuela’s Choking Points: Here’s Where Maduro Gets His Revenue 

(Bloomberg) -- The struggle for control of Venezuela is not only about securing the military’s support or holding the streets. It is also about how much of the country’s dwindling financial resources President Nicolas Maduro can keep his hands on.

The U.S., backed by Brazil, Canada and others, has recognized Juan Guaido, the National Assembly leader, as Venezuela’s legitimate president, and is trying to channel as much of the country’s income to him as possible. The Trump administration tightened the screws with a de-facto block on exports of Venezuelan oil to the U.S.

With debt rising dramatically and reserves diminishing fast, following is a snapshot of the Maduro administration’s financial lifelines.


Representing the overwhelming majority of Venezuela’s income, oil production plummeted to 1.22 million barrels per day in December, half the level of three years ago. Assuming an average price of $52.12 for that month, revenue would have totaled $1.86 billion. Output is expected to fall another 33 percent in 2019, according to Fitch.The biggest takers of Venezuelan crude in December were the U.S. (407,400 b/d), India (293,500 b/d), and China (238,700 b/d), according to fixture reports and ship-tracking data compiled by Bloomberg.The U.S. on Monday announced sanctions on Venezuela’s state-owned oil company PDVSA.Freezing of U.S. and European accounts is likely to bring oil production to a standstill and cause the economy to contract by 26.4 percent in 2019, Torino Chief Economist Francisco Rodriguez wrote.


Gold reserves plunged to $5.45 billion in November from $6.76 billion in July, and from $21.27 billion in Sept. 2011, according to Caracas Capital, an investment bank and financial consultancy. It says the bulk of the reserves are held by Venezuela itself.Accessing Venezuela’s gold reserves overseas is becoming increasingly difficult for Maduro, as shown by the Bank of England’s decision to deny a withdrawal request.


Total external debt in 2018 was $157 billion or 150 percent of GDP, up from 131 percent a year earlier, according to Torino Capital of New York, a boutique investment firm.China has been a constant source of financing for Venezuela, having lent some $70 billion, mostly against oil, according to Asdrubal Oliveros, of Caracas-based Ecoanalitica. Torino Capital estimates that Venezuela owes China $13.5 billion.


Citgo Petroleum Corp., the Houston-based subsidiary of PDVSA, buys most of Venezuela’s crude. U.S. Treasury Secretary Steven Mnuchin said Monday that Citgo would be able to continue to operate but won’t be allowed to remit money to the Maduro regime. Russia’s Rosneft has a 49.9% stake in Citgo as collateral for a $1.5 billion loan.Vast amounts of oil revenue are estimated to have been siphoned off PDVSA and parked abroad, including in the U.S., Spain, and Russia.

The biggest export markets for Venezuela are the U.S. (40.4%), China (24.4%) and India (23.3%), Torino Economics figures show. Other top trading partners include Mexico, Singapore and Spain.Foreign donors, including the United Nations, have provided food aid and medicine. Around 12 percent of the population is under-nourished.
--With assistance from Ben Bartenstein and Lisa Beyer.

To contact the reporters on this story: Fabiola Zerpa in Caracas Office at;Hannah Recht in New York at

To contact the editors responsible for this story: Vivianne Rodrigues at, ;Rosalind Mathieson at, Raymond Colitt, Alan Crawford

For more articles like this, please visit us at

Guaido Says He’ll Take Over Venezuela Accounts, Name New Citgo Board

Guaido Says He’ll Take Over Venezuela Accounts, Name New Citgo Board

(Bloomberg) -- Venezuelan opposition leader Juan Guaido said he’s taking control of government bank accounts abroad and is appointing people to Petroleos de Venezuela’s operations in other countries.

Guaido in a statement on his Twitter account said Venezuelan accounts will be transferred to “legitimate authorities” to prevent the further “looting” of state funds that could help citizens. The opposition-led legislature, of which he is the head, will oversee their disbursement, he said.

Supporters in the U.S., Latin America and Europe have hurried to recognize Guaido as the nation’s rightful leader, and have threatened sanctions or even military intervention if socialist President Nicolas Maduro moves against him. The U.S. on Monday imposed sanctions on PDVSA meant to strengthen Guaido’s chances of taking control.

Guaido on Monday also said he’s naming new boards for PDVSA and its U.S. refining arm, Citgo, to begin the recovering the nation’s mainstay industry. "We made this decision to ensure Citgo still belongs to Venezuelans," Guaido wrote.

In his statement, Guaido also called on Venezuelans working in state companies abroad to remain in place.

To contact the reporters on this story: Patricia Laya in Caracas at;Andrew Rosati in Caracas at

To contact the editors responsible for this story: Daniel Cancel at, Stephen Merelman, Robert Jameson

For more articles like this, please visit us at

'Total shock': PDVSA workers take stock of U.S. sanctions' impact

Nicolás Maduro en un acto de PDVSA en 2016 (Foto. Flickr)

By Deisy Buitrago and Mircely Guanipa

CARACAS (Reuters) - Shock and fear swept through the headquarters of Venezuela's state-owned oil firm, PDVSA, on Monday, employees said, after the United States imposed sanctions aimed at limiting President Nicolas Maduro's access to oil revenues.

A high-level manager said PDVSA President and Oil Minister Manuel Quevedo was ensconced in his office. Several employees and union leaders wondered how much worse PDVSA's situation could get now that President Donald Trump's administration had frozen its crucial U.S.-based assets.

"There is total shock. This company is already too beat-down," the manager said on condition of anonymity. PDVSA was once among the world's leading oil companies, but has suffered years of mismanagement and output declines.

White House national security adviser John Bolton said the sanctions on PDVSA were intended to prevent Maduro's government from siphoning off funds from the oil company to maintain his grip on power. Bolton said they would block Maduro from accessing PDVSA assets worth $7 billion and cost him $11 billion in lost export proceeds over the next year.

Trump's order restricts assets including PDVSA's U.S. refining arm, Citgo Petroleum Corp,, Venezuela's most important foreign asset and a key source of foreign income.

The U.S. government, along with countries around the world, have declared Maduro an illegitimate usurper and have thrown support behind the leader of the Venezuelan opposition, Juan Guaido, who has proclaimed himself interim president.

Maduro began a second term on Jan. 10 after an election last year that the opposition and the United States considered a fraud. Maduro says he is victim of an economic war and accuses Trump of directing a coup against his socialist government.

On Monday, Maduro said the United States was unlawfully seeking to "steal" Citgo and PDVSA would take legal action to defend Venezuela's U.S. interests.

Since being appointed oil minister in 2017, Quevedo, a National Guard general, has enacted a series of measures that oil industry experts and PDVSA employees say have pushed the company, which accounts for over 90 percent of export revenues, toward ruin. 

Quevedo gave the company's reins to military managers with scant oil experience, while workers face the risk of arrest and charges of sabotage or corruption, and contracts go to small, little-known firms with no experience in the sector, according to a Reuters special report last month that cited former and current officials.


Ivan Freites, a PDVSA union leader, said the sanctions marked the moment for "responsible people" to take over Venezuela's oil industry, where production has slid to a 70-year-low after years of crushing debt and shrunken investment.

"It's an industry ruled by mafias, where smuggling is the chief operation," Freites said.

Thousands of PDVSA's workforce, which totals some 100,000 employees, have already fled abroad to escape poor pay and shortages of food and medicine, draining the company of expertise, according to employees.

Employees said there were no tears at PDVSA's headquarters, just stony-faced resignation. They said they were tired of Quevedo's military management and the corruption they alleged had spread to every corner of the company.

"There is no return now. Either Maduro leaves, or the country sinks completely," said one plant operator.

The Trump administration had long held off on targeting Venezuela's vital oil sector for fear it would hurt U.S. refiners and deepen Venezuela's economic crisis. The United States stopped short of imposing a ban on imports of Venezuelan oil, which U.S. oil refiners had opposed.

(Reporting Deisy Buitrago and Mircely Guanipa; Additional reporting by Isaac Urrutia; Writing by Angus Berwick; Editing by Peter Cooney)

Monday, January 28, 2019

Maduro Boxed In as Guaido Consolidates Position in Venezuela

(Bloomberg) -- Venezuelan opposition leader Juan Guaido has so far failed to sway the armed forces to his side as he calls for elections that could unseat strongman President Nicolas Maduro. But with every day that Maduro permits Guaido to roam Caracas, holding rallies and building a government in waiting, the Bolivarian revolution’s invincibility seems to decay.

“The more famous he becomes, the more power he amasses inside and outside Venezuela, it becomes harder and harder for Maduro to jail him,” Dmitris Pantoulas, a Caracas political analyst, said Monday. “Now, it’s practically impossible.”

Supporters in the U.S., Latin America and Europe have hurried to recognize Guaido, the head of the National Assembly, as the nation’s rightful leader, and levied threats of sanctions or even military intervention if Maduro moves against him. Guaido has named aides who could oversee the country’s oil industry and whatever financial resources remain after years of ruinous economic policy. But Maduro has dealt out lucrative industrial franchises to top military officers and Guaido must wrest the rank and file from their command.

Soft Measures

He has called for supporters to fan out Wednesday to distribute copies of a legislative measure that would extend amnesty and forgiveness to members of the armed forces who abandon the socialist regime. The tactic exerts a steady pressure on Maduro, but even as the president allows Guaido himself freedom, he continues to use violence and imprisonment to perpetuate his power.

On Monday, a group of human rights organizations said at a press conference that 35 people have been killed in demonstrations against the president since Jan. 21.

“We have corroborated the number, with name, places and those presumed responsible,” said Rafael Uzcategui, general coordinator of the human-rights group Provea. The coalition, which also includes the Penal Forum and the Venezuelan Observatory of Social Conflict, said that 850 people have been arrested due to the demonstrations, many taken at night from their homes.

Quiet Talks

Still, the question now is about the depth of loyalty among the armed forces, as Guaido taps the deep discontent in a country whose economy has been wrecked by Maduro’s authoritarian brand of socialism. Critics say that Maduro has essentially bought off the military, allowing money laundering, fraud, illegal mining and other crimes.

Guaido told The Washington Post Sunday that he was in behind-the-scenes talks with “government officials, civilian and military men” and he is assembling a coterie of prospective government officials. 

#ÚLTIMAHORA #EXCLUSIVAEVTV LaConsul de Miami, Scarlet Salazar, desconoció al usurpador Nicolás Maduro y reconoció como Presidente Interino a @jguaido

— EVTV Miami (@EVTVMiami) January 28, 2019 
Maduro’s top military attache in Washington, Colonel Jose Luis Silva, declared loyalty Saturday to Guaido. One of the consuls in Miami, Scarlet Salazar, followed suit.

The talks for an essential shadow government are in the earliest phases but several people have been mentioned.

Most prominent is Ricardo Hausmann, a key economic minister in the 1990s who runs the Venezuela Project at Harvard. He is said to be helping Guaido informally and has already drafted a plan to rebuild the nation, from the economy to energy.

Shadow Government

Carlos Vecchio, a political coordinator from Guaido’s Popular Will party, has been named business representative to the U.S. and met on Saturday with Elliott Abrams, the new liaison to Venezuela for Donald Trump’s administration.

Bond investors have taken note. Venezuela’s benchmark bonds due in 2027 have rallied to their highest since November 2017. Last week, the U.S., Canada and most Latin American governments recognized Guaido as the nation’s leader. The Bank of England denied a request this month by Maduro’s cash-hungry government to pull $1.2 billion of gold out of its vaults.

Critics caution it’s too early to predict any sort of success – Guaido holds no palpable power over Maduro or the nation – but his supporters nonetheless have been working to convince individual soldiers to defect.

Congressman Ismael Leon and other Guaido supporters on Sunday walked up to the gates of the army command building in the Caracas neighborhood of San Bernardino and slipped copies of the amnesty bill through the bars. The group asked the silent group of guards on the other side to “not raise their weapons against those peacefully protesting.”

“They didn’t want to receive us,” Leon said. “But with their eyes they told us they knew why we were doing what we were doing. They understood us.”

A group of four national guards in the neighborhood of La Florida said two people had come up to them in the morning and respectfully described the law to them. The response was less friendly outside of commands in El Paraiso and Petare, Caracas’ biggest slum, where reports on local media show guards burning the copies that were handed to them.

--With assistance from Fabiola Zerpa and Ben Bartenstein.

To contact the reporters on this story: Alex Vasquez in Caracas Office at;Andrew Rosati in Caracas at

To contact the editors responsible for this story: David Papadopoulos at, Stephen Merelman, Daniel Cancel

NNPC October Numbers Revealed

NNPC, Nigeria’s state-run firm, revealed that the country earned $640.35 million from the export of crude oil and gas for the month of October 2018. This was disclosed in its monthly Financial and Operation report for October 2018.

The company said the total export receipt of $640.35 million recorded in October 2018 was higher than the $527.70 million earned in September 2018.

The financial results showed that $450.44 million accrued from crude oil sale with gas, while miscellaneous receipts stood at $173.92 million and $15.99 million respectively.

In the downstream sector, the report revealed that the Petroleum Products Marketing Company (PPMC), a downstream subsidiary of NNPC, posted a receipt of N231.33 billion from sales of white products in the month of October 2018 compared with N150.25 billion sold in September 2018.

“Total revenues generated from the sales of white products for the period October 2017 to October 2018 stand at N2.684 trillion, where PMS contributed about 88.32% of the total sales value of N2.371 trillion.

“To ensure continuous increase of PMS supply and effective distribution across the country, a total of 1.66 billion liters of petrol, translating to 55.50 million liters/day, were supplied for the month under review,’’ the report said

A total of 1.066 Bcf gas was supplied to the domestic market in October, while about 627.33 Mmscf/d of gas was used as feedstock for Nigeria’s gas-fired power plants to generate an average power of about 2,349MW.

Friday, January 25, 2019

Are chemical tankers ready to meet the IMO fuel regulations?

The impending IMO fuel deadline is creating a dilemma for chemical tanker owners as to whether to install scrubbers, or replace high sulphur fuel (HSFO) by burning cleaner fuels, such as low sulphur fuel oil (LSFO), LPG or LNG.
Space is often limited on a small chemical tanker, so fitting a scrubber is not always an option. And the high cost of retrofitting a scrubber at around $1.5-$2 mill per ship is proving to be a further obstacle, Drewry Shipping Consultants said in an industry note.

Current statistics revealed that only 21 chemical tankers in the current fleet have scrubbers installed, while an additional 76 vessels are pending installation as of 1st January, 2019.

This means that at the start of 2019, almost 98% of the existing chemical fleet is facing the prospect of having to use high-cost cleaner fuels when the regulation comes into force in 2020, Drewry said.

Some 18 coated chemical tankers have been converted to use LNG on a dual-fuel basis and there are eight methanol-fuelled vessels, plus four on order, trading chemicals.

Between now and the deadline, further scrubber retrofits will take place. Yet, at best, this will only be a small number.

This raises the question of whether owners will be able to pass on higher costs to charterers. Given the current dynamics of the sector as a whole, this is in doubt, and Drewry thought that profitability in chemical shipping will continue to be squeezed in 2020.

Thursday, January 24, 2019

Nigeria's $15 Billion Oil Refinery Is on Track, Dangote Says

Workers climb scaffolding surrounding a storage tank at the under-construction Dangote Industries Ltd. oil refinery and fertilizer plant site in the Ibeju Lekki district, outside of Lagos. Photographer: Tom Saater/Bloomberg
  • Billionaire says 650,000-barrel-day plant to finish next year
  • Wood Mackenize says refinery won’t be completed until 2022
Nigerian billionaire Aliko Dangote said he’s on schedule to finish by next year his $15 billion oil refinery, which will be one of the world’s biggest, despite analysts saying the timeline is ambitious.
“There are quite a lot of challenges, but we’re moving,” Dangote told reporters at a conference in Paris about the plant, which is being built near Lagos, Nigeria’s commercial capital, and designed to process 650,000 barrels of crude daily. “We’re still targeting next year for commissioning.”

Aliko Dangote
Photographer: Wei Leng Tay/Bloomberg
The 61-year-old said he will export about 35 percent of the refinery’s products, while the rest will serve the local market. His Dangote Industries Ltd. said last year the plan is to produce about 50 million liters (13.2 million gallons) a day of gasoline and 15 million liters of diesel, though output can be changed according to demand. The company has been in talks with oil traders including Royal Dutch Shell Plc, Vitol Group and Trafigura Group Pte about them supplying crude and buying refined fuel.

Analysts have questioned whether Dangote, worth $10.8 billion according to the Bloomberg Billionaire’s Index, will be able to complete such a massive project on time and within costs. Edinburgh-based Wood Mackenzie doesn’t see the refinery starting production until 2022.

The complex will include a $2.5 billion fertilizer factory with a capacity of 3 million metric tons annually, set to be ready this year, and a petrochemical plant. They will be powered by gas, which will be sent from the Niger River delta via two 550-kilometer (341-mile) underwater pipelines, also costing Dangote about $2.5 billion.

“By next year, we’ll be exporting almost 2 million metric tons of urea and ammonia,” Dangote said.

2018 Year-End Oil Price Declines Won't Stop Texas Oil Industry Growth

Graphic for News Item: Royalty Checks Shrink as Oil, Gas Prices Tumble

After 23 consecutive months of growth, the Texas Petro Index (TPI) declined in November and December, Texas oil economist Karr Ingham told news reporters Jan. 23.

The decline comes in response to the sharp drop in crude oil prices at the end of 2018 which he said “spooked producers.”

Still, he maintains that the recent declines in the TPI doesn’t necessarily mean an end to the current cycle of growth and expansion for Texas’ upstream oil and gas economy.

“It has virtually always been the case that a decline in the TPI signaled the onset of a contraction of some magnitude, but that may not be the case this time,” said Ingham. “A series of geopolitical market events may have been the primary culprit in that particular price event, and the market seems to be working through those in early 2019.”

Ingham said numbers from the Texas Workforce Commission reveal that oil and gas employment declined by about 500 jobs.

However, he says that’s more of a coincidence rather than a direct result of falling oil prices.

“Employment never responds to oil price declines that quickly. It was coincidental,” he said.

Ingham goes on to highlight the record production numbers in Texas and the United States in 2018.
“Texas really flexed its muscle in 2018,” he said.

The state’s crude oil production made up 40 percent of total U.S. crude production in 2018. Texas is on track to provide 45 percent of U.S. production by year-end 2019.

Wednesday, January 23, 2019

Statement from President Donald J. Trump Recognizing Venezuelan National Assembly President Juan Guaido as the Interim President of Venezuela

A composite of two photos stitched together shows Donald Trump giving the thumbs up and Juan Guaido with his hand on his heart.

Today, I am officially recognizing the President of the Venezuelan National Assembly, Juan Guaido, as the Interim President of Venezuela.  In its role as the only legitimate branch of government duly elected by the Venezuelan people, the National Assembly invoked the country’s constitution to declare Nicolas Maduro illegitimate, and the office of the presidency therefore vacant.  The people of Venezuela have courageously spoken out against Maduro and his regime and demanded freedom and the rule of law.

I will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy.  We encourage other Western Hemisphere governments to recognize National Assembly President Guaido as the Interim President of Venezuela, and we will work constructively with them in support of his efforts to restore constitutional legitimacy.  We continue to hold the illegitimate Maduro regime directly responsible for any threats it may pose to the safety of the Venezuelan people.  As Interim President Guaido noted yesterday: “Violence is the usurper’s weapon; we only have one clear action: to remain united and firm for a democratic and free Venezuela.”

President Donald J. Trump

Venezuela: opposition stages anti-Maduro protests

Tuesday, January 22, 2019

Permian Shale Oil Boom Holds Mixed News for OPEC

Permian Shale Oil Boom Holds Mixed News for OPEC

The year has barely begun but it’s already shaping up nicely for OPEC, with crude rebounding sharply after the worst fourth-quarter performance since 2014.

A new production cuts deal with Russia and thawing U.S.-China trade relations have given the market a boost. But for OPEC, good news often comes hand-in-hand with bad news. For that, look no further than the Permian basin.

The biggest shale play in the U.S. is set to pump 3.8 million barrels a day this month, according to Energy Information Administration data. That’s more than the United Arab Emirates, the Organization of Petroleum Exporting Countries’ third-largest producer.

The cartel’s decision to cut its own production has actually thrown a “lifeline” to companies in the U.S. by stabilizing crude prices, according to Saudi Energy Minister Khalid Al-Falih. This is a dark cloud on OPEC’s horizon, but there’s some good news.

Prolific output from Texas and New Mexico is placing serious pressure on infrastructure. The region isn’t equipped to handle such output levels and could only ship out around 3.5 million barrels a day at the end of 2018, according to Bloomberg Intelligence.

These pipeline constraints mean oil flows in the Permian have less of an effect on the globally relevant prices that OPEC cares about. As production surged last year, the value of crude delivered at the Midland, Texas hub relative to Cushing, Oklahoma -- the delivery point for West Texas Intermediate -- and on the Gulf coast at Houston dropped, according to a Bloomberg Intelligence report.

The bad news for OPEC is that the U.S. is working on another wave of pipeline expansion, which could add 2.1 million barrels a day of takeaway capacity by the end of 2019, and another 2.2 million by 2021, according to Bloomberg Intelligence.

On the plus side for OPEC, shale oil is of the lighter variety that’s less amenable to U.S. Gulf coast refineries configured for heavier grades. That quality could keep the pressure on shale oil prices compared with WTI, and subsequently diminish the cash flow of local explorers and producers.

Problem is, Asian refineries can take the lighter crude. If U.S. shale can reach those plants, then American drillers will happily keep pumping and threatening OPEC’s share of the world’s fastest growing market.

The crude has to get to Asia first, and limitations in U.S. export infrastructure work in OPEC’s favor here. Constraints on tank space, shipping facilities and dock capacity at U.S. ports still have to be resolved, according to Bloomberg Intelligence.

To contact the reporter on this story: Christopher Sell in London at To contact the editors responsible for this story: James Herron at Rakteem Katakey

Monday, January 21, 2019

Shell Starts Production at New Petrochemicals Unit in U.S. Gulf Coast

Shell’s Geismar chemicals manufacturing site

The successful completion of a major expansion project makes Shell’s Geismar chemicals manufacturing site the largest producer of alpha olefins in the world.

Shell Chemical LP (Shell) has announced the start of production of the fourth alpha olefins (AO) unit at its Geismar, Louisiana, USA chemical manufacturing site. The 425,000-tonne-per-year capacity expansion brings total AO production at Geismar to more than 1.3 million tonnes per annum. Start-up operations began in December 2018.

Alpha olefins are key ingredients in many finished products that people use and enjoy every day, including laundry detergents, motor oils, and hand soaps.

“Our team delivered this world-class expansion project safely, on time and within budget,” said Graham van’t Hoff, Executive Vice President for Shell’s global chemicals business. “This is a key growth project for Shell’s global chemicals business. Geismar will continue to play a leading role in providing the materials for products that an increasing number of people need and enjoy.”

The new unit strengthens Shell’s leading position in the US Gulf Coast and illustrates the strategic value of its integrated downstream business. The Geismar site is supported with advantaged ethylene feedstock from Shell’s nearby Norco, Louisiana and Deer Park, Texas manufacturing sites, enabling the site to respond to market conditions.

The expansion project contains around 3,570 tonnes of steel, 18,290 metres of concrete and 85 linear kilometres of pipe. Several new pieces of infrastructure were built as part of the expansion, including a new water cooling tower, a significant expansion of the site’s rail loading capabilities, and the repurposing of a previously idled tank farm.

Thursday, January 17, 2019

OPEC oil production sinks in December as Saudis cut output more than expecte

A file photo showing a Libyan oil worker from the Libyan National oil and gas company checks an oil pipelines at the Zawiya oil installation in Zawiya, Libya.
Mahmud Turkia | AFP | Getty Images
A file photo showing a Libyan oil worker from the Libyan National oil and gas company checks an oil pipelines at the Zawiya oil installation in Zawiya, Libya.
  • OPEC's oil output falls by 751,000 barrels per day to 31.6 million bpd in December, the producer group reports.
  • Saudi Arabia slashes production by 468,000 bpd to just over 10.5 million bpd.
  • The drop shows OPEC got a jump on a deal with 10 other nations to cut production beginning in January.
When OPEC announced the deal, Saudi Energy Minister Khalid al Falih initially said his country's output would fall to 10.7 million bpd in December from a record high 11.1 million bpd in November. The Saudis are targeting another drop to 10.2 million bpd this month, Falih has said.

The pullback in OPEC production was deepened by supply disruptions in Libya and Iran.

Output in Libya fell by 172,000 bpd to 928,000 bpd in December, after a group of armed protesters and aggrieved workers took over the country's largest oil field.
 Iraq saw the biggest jump in production in the final month of the year. It's output rose 88,000 bpd to just over 4.7 million bpd. At that level, Baghdad would need to cut about 200,000 bpd in January to meet its quota under the supply cut agreement. Iraq, OPEC's second largest producer, regularly pumped above its quota throughout the group's last round of supply cuts.

December marks OPEC's first monthly report since Qatar left the organization amid an ongoing blockade against the Gulf nation by neighbors including Saudi Arabia and UAE.

Excluding Qatar, OPEC forecasts demand for the group's oil will average 30.8 million bpd in 2019, about 900,000 bpd lower than last year. Demand for OPEC's oil fell by about 1.2 million bpd last year, the group says.

OPEC+ collaboration is 'essential'

OPEC's forecast for growth in oil supply and demand is largely unchanged from its last report. It sees worldwide consumption increasing by 1.29 million bpd to just over 100 million bpd.

OPEC revised its outlook for non-OPEC output growth slightly lower, but still sees 2019 supply growth at 2.1 million bpd, outstripping the increase in demand.

In its final report of the year, OPEC highlighted the rise in U.S. interest rates and tightening monetary policy elsewhere in the world. OPEC notes that central bankers appear poised to tap the brakes on further tightening in 2019, which could have implications for global economic growth and the oil market.

"While the economic risk remains skewed to the downside, the likelihood of a moderation in monetary tightening is expected to slow the decelerating economic growth trend in 2019," OPEC said.

"If the anticipated moderation in monetary policies coupled with an improvement in financial markets materializes, this could provide further support to ongoing increases in non-OPEC supply."

The potential increase in crude supply will make it essential for OPEC, Russia and other producer nations to continue coordinating production to keep the oil market balanced, the group said.

Tuesday, January 15, 2019

First U.S. crude cargoes head to China since trade breakthrough: sources

Vessel: Alboran

HOUSTON (Reuters) - Three cargoes of U.S. crude are heading to China from the U.S. Gulf Coast, trade sources said on Monday, the first departures since late September and a 90-day pause in the two countries’ trade war that began last month.

The vessels left Galveston, Texas, last month and are scheduled to arrive at Chinese ports between late January and early March, according to shipbrokers and vessel tracking data. The shipments mark a change since Chinese buyers largely began avoiding U.S. oil during the trade dispute that flared last summer. 

“It looks like China has resumed purchasing U.S. crude,” one U.S.-based shipbroking source said. The person, who declined to be identified because he was not authorized to speak publicly about the matter, said the destination data could yet change. 

China is the world’s biggest crude importer and became a top buyer of U.S. crude after Washington lifted a 40-year ban on shipments in late 2015. It imported 325,000 barrels per day (bpd) of U.S. crude in the first nine months of 2018, customs data showed. 

Beijing has also resumed purchases of some U.S. soybeans for delivery this year. But China’s 25 percent tariff on U.S. soybean cargoes remains in place. 

The supertanker Alboran carrying about 2 million barrels of oil recently rounded South Africa’s Cape of Good Hope and is due to arrive in China late this month, said brokers, citing fixture data. 

The Almi Atlas and the Manifa, two other vessels carrying 2 million barrels of crude, are expected to reach China in late February or early March. The two ships are currently located off Brazil, according to Refinitiv Eikon vessel tracking data. 

Wall Street falls amid growth concerns
The cargoes mark the first shipments of U.S. crude to China since U.S. President Donald Trump in December said China would begin taking more American products. 

“It’s a follow through of statements by the Chinese government they would indeed begin purchasing commodities from the United States again,” said Reid I’Anson, an energy economist at data provider Kpler. 

As China reduced U.S. crude imports, more American oil flowed into neighboring Asian countries, including India, Japan, Taiwan and South Korea. U.S. exports climbed to 2.33 million bpd in October, up from 2.2 million bpd in June. 

Reporting by Collin Eaton; Editing by Richard Chang and Cynthia Osterman

Monday, January 14, 2019

Venezuela congress slams oil deals with U.S., French companies

FILE PHOTO: A view of a gas station of the Venezuelan state-owned oil company PDVSA in Caracas, Venezuela August 20, 2018. REUTERS/Marco Bello

CARACAS (Reuters) - Venezuela’s opposition-run congress on Tuesday issued a resolution calling deals between state-run oil company PDVSA [PDVSA.UL] and U.S. and French companies announced this week illegal, since they had not been sent to lawmakers for approval.

The body said the oilfield deals with France’s Maurel & Prom (MAUP.PA) and little-known U.S. company Erepla violated article 150 of Venezuela’s constitution, which requires that contracts signed between the state and foreign companies be approved by the National Assembly, as Venezuela’s congress is known. 

“They are giving concessions that violate the law,” said lawmaker Jorge Millan, mentioning the two contracts. 

Congress, largely stripped of its power since the opposition took it over in 2016, is unlikely to be able block the deals from going forward. But the rejection could create legal complications under a future government. 

Maduro is set to be inaugurated for his second consecutive term on Thursday following a May vote considered a sham by the domestic opposition and many foreign governments. A regional bloc of Latin American countries last week called on Maduro, a protege of the late Hugo Chavez, not to take office. 

The deals are part of Maduro’s effort to reverse a sharp decline in the OPEC nation’s crude output that has crippled its economy. Erepla said it would invest up to $500 million in three fields, while Maurel & Prom said it would invest up to $400 million for a 40 percent stake in an oilfield joint venture. 

PDVSA did not respond to a request for comment. Maurel & Prom did not immediately respond to a request for comment outside of normal business hours in France. 

Weak trading slams Citigroup's revenue
A spokesman for Erepla, registered in Delaware in November and part-owned by a prominent Florida Republican donor and shipping magnate, said Venezuela’s hydrocarbons law “allows PDVSA to contract with companies like Erepla to execute field services without any additional approvals required.” 

Referring to the Erepla deal during the congressional session earlier on Tuesday, Millan said that while PDVSA referred to the agreement as an oilfield service contract, “the company will be conducting oil exploration and production activities.” 

Maurel & Prom Chief Executive Michel Hochard said the company would act “in accordance with the instructions given” by Maduro and Oil Minister Manuel Quevedo, according to a statement attributed to him in a PDVSA press release. 

Reporting by Mayela Armas; Writing by Luc Cohen; Editing by Lisa Shumaker