HOUSTON (Reuters)–American oil firm ConocoPhillips has moved to take over Caribbean assets of Venezuela’s state-run PDVSA to enforce a US $2 billion arbitration award over a decade-oil nationalisation of its projects in the South American country, according to two sources familiar with its actions.
The firm targeted facilities on the islands of Bonaire and St. Eustatius that play critical roles in processing, storing and blending PDVSA’s oil for export. It received court attachments that froze the assets pending further action, one of the sources said.
The attachments could further impair PDVSA’s declining oil sales and the country’s convulsing economy. Cash-strapped Venezuela is almost completely dependent on oil exports for revenue. It 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.
“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 in an email to Reuters. The firm added it will work with the community and local authorities to address issues that may arise as a result of enforcement actions.
Conoco declined to elaborate on its court actions.
PDVSA has significant assets in the Caribbean. On Bonaire, PDVSA owns the 10-million-barrel BOPEC terminal that has been critical to its logistics and fuel shipments to customers, particularly in Asia.
On St. Eustatius, it rents storage tanks at the Statia terminal, owned by US NuStar Energy. More than 4 million barrels of Venezuelan crude were retained in Statia following the court order, according to one of the sources.
The San Antonio Texas-based firm did not respond to a request for comment.
PDVSA also operates the 335,000-barrel-per-day Isla refinery and Bullenbaai terminal on Curaçao, its main Caribbean facilities for processing, blending and shipping crude. In Aruba, PDVSA and its unit Citgo lease a refinery and a storage terminal.
PDVSA on Friday ordered its oil tankers sailing across the Caribbean to return to Venezuela to avoid court action, one of the sources said. Several cargoes of Venezuelan crude have been retained or seized in recent years over unpaid freight fees and related debts.
“This is terrible (for PDVSA – Ed.),” said a source familiar with the court order of attachment. The state-run company “cannot comply with all the committed volume for exports” and the Conoco action imperils its ability to ship fuel oil to China or access inventories to be exported from Bonaire.
Conoco had sought up to $22 billion from PDVSA for broken contracts and loss of future profits from two oil-producing joint ventures, which were nationalized in 2007 under late Venezuela President Hugo Chavez. The US firm left the country after it could not reach a deal to convert its projects into joint ventures controlled by PDVSA.
Source: The Daily Herald https://www.thedailyherald.sx/islands/76347-conoco-targets-statia-and-bonaire-terminals
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