Published On: Mon, Jun 25th, 2018

Russian oil bought by PDVSA for Cuba discharges in Curaçao

BullenbaaiHOUSTON - A tanker that for more than a month was unable to deliver Russian crude to Venezuela's PDVSA amid a dispute between the state-run firm and ConocoPhillips has discharged its cargo in the Caribbean, and a second vessel is soon to follow.

Conoco in May got court orders to seize PDVSA's assets, inventories and oil cargoes in the Caribbean to satisfy a $2 billion arbitration award. The measures were later partially revoked, but PDVSA has been unable to fully use its refining and storage facilities in the region, diverting cargoes that have contributed to export delays.

Aframax tanker Advante Atom originally was to discharge Russian Urals crude in mid-May at PDVSA's Bullenbay terminal in Curaçao, where it would be re-exported to Cuba, one of several such cargoes since January.

It was not immediately clear what company ultimately received the cargo.

A second Russian crude cargo that was supposed to be delivered to PDVSA in May, on Aframax tanker British Cygnet, was moved to Aruba's STS area in early June to transfer its load. It has waited for six weeks to deliver.

PDVSA exported 765,000 barrels per day of crude and refined products to customers in the first two weeks of June, a 32 percent decline compared with May, excluding shipments by two of the company's joint ventures, which export separately.

Manuel Quevedo, Venezuela's oil minister and the state-run firm's president, last week said the country expects to recover a portion of its lost crude output this year. But there are no early signs of a reversal in the declining trend. The number of active rigs fell to 28 in May versus 54 in the same month of 2017.

Secondary sources quoted in the Organization of the Petroleum Exporting Countries' monthly report estimated Venezuela's oil production fell to 1.392 million bpd last month, the lowest since the 1950s.

The lack of Venezuelan crude supply has forced the 335,000-bpd Isla refinery, owned by the Curacao government, to seek a temporary operator to replace PDVSA, which has not sent oil to the facility since late April.

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