Conoco to take over Venezuelan PDVSA’s Caribbean assets

HOUSTON/CARACAS: US oil firm ConocoPhillips has moved to take Caribbean assets of Venezuela’s state-run PDVSA to enforce a $2 billion arbitration award over a decade-oil nationalisation of its projects in the South American country, according to three sources familiar with its actions.
The US firm targeted facilities on the islands of Curacao, Bonaire and St Eustatius that accounted for about a quarter of Venezuela’s oil exports last year. The three play key roles in processing, storing and blending PDVSA’s oil for export.
The company received court attachments freezing assets of at least two of the facilities, and could move to sell them, one of the sources said.
Conoco’s legal manoeuvres could further impair PDVSA’s declining oil revenue and the country’s convulsing economy. Venezuela is almost completely dependent on oil exports, which have fallen by a third since its peak and its refineries ran at just 31 per cent of capacity in the first quarter.
The Latin American country is in the grip of a deep recession with severe shortages of medicine and food as well as a growing exodus of its people.
PDVSA and the Venezuelan foreign ministry did not respond on Sunday to requests for comment. Dutch authorities said they are assessing the situation on Bonaire.
Conoco’s claims against Venezuela and state-run PDVSA in international courts have totalled $33 billion, the largest by any company.
“Any potential impacts on communities are the result of PDVSA’s illegal expropriation of our assets and its decision to ignore the judgment of the ICC tribunal,” Conoco said.
The US firm added it will work with the community and local authorities to address issues that may arise as a result of enforcement actions.
PDVSA has significant assets in the Caribbean. On Bonaire, it owns the 10-million-barrel BOPEC terminal which handles logistics and fuel shipments to customers, particularly in Asia. In Aruba, PDVSA and its unit Citgo lease a refinery and a storage terminal.
On the island of St Eustatius, it rents storage tanks at the Statia terminal, owned by US NuStar Energy, where over 4 million barrels of Venezuelan crude were retained by court order, according to one of the sources.
NuStar is aware of the order and “assessing our legal and commercial options,” said spokesman Chris Cho. The company does not expect the matter to change its earnings outlook.
Conoco also sought to attach PDVSA inventories on Curacao, home of the 335,000-barrel-per-day Isla refinery and Bullenbay oil terminal. But the order could not immediately be enforced, according to two of the sources.— Reuters