Published On: Fri, Nov 20th, 2015

Tankers at Bullenbay ask Venezuela’s PDVSA for cargo prepayments

BullenbaaiWILLEMSTAD - Big oil suppliers have started requiring prepayment when selling cargoes of crude and refined products to Venezuela's PDVSA, in an effort to limit potential risks from the state-run company's well-known cashflow woes. According to Reuters, five sources from firms involved in the deals indicated this to them.

One international trading firm, which has had strong commercial ties with PDVSA, has decided to limit future spot sales to the company over worries that even a prepayment agreement would carry risks, two of the sources said.

The Venezuelan company has ramped up tenders on the open market this year to import crude and diluents for its extra heavy oil output, but payments are taking a long time to arrive because low oil prices have crimped revenues, the sources said.

It has also been buying gasoline blend stock and other refined products after three of its four domestic refineries, Amuay, Cardon and El Palito, were affected in October and early November by power outages.

A PDVSA representative did not respond to a request for comment. Last month, PDVSA President Eulogio Del Pino said the company would honor all debts despite low oil prices.

PDVSA's latest detailed financial statements show that at the end of 2014 its financial debt reached $46.15 billion, while its accounts payable to suppliers were $20.86 billion.

Statoil, Royal Dutch Shell and France's Total, among others, have delivered some 13 cargoes of African and Russian crudes to PDVSA during 2015 at its Bullenbay terminal in Curaçao, according to tender documents, fixtures, vessel tracking data and PDVSA.

The Venezuelan firm has also made recent purchases of refined products from Vitol, Trafigura and Noble Group .

Some providers are agreeing to be paid at least in part with Venezuelan oil or requiring a type of prepayment that involves loading cargoes and paying for them just before delivery, giving PDVSA a few weeks to pay for crudes coming from West Africa, sources added.

Even so, logistical headaches can arise. The tanker Maran Pythia, booked by Statoil, loaded on Oct. 19 in Angola and has been waiting around Curaçao to discharge since early November. The Los Angeles Spirit tanker booked by Total has not discharged after arriving in the Caribbean on Nov. 15, according to vessel tracking data.

Other 11 tankers carrying refined products imported by Venezuela - from gasoline blend stock to gasoil - are also waiting around PDVSA's terminals to discharge, almost all of them coming from the U.S. Gulf Coast, the data say.

Statoil said it has a policy not to comment on trade issues. Shell and Total did not answer requests for comment.

Sources said some international trading firms are routing sales through small firms willing to take on payment risk.

PDVSA's latest tender to import crude was awarded this week to a relatively unknown firm named Helsinge Inc, which confirmed the sale, for a 1 million-barrel cargo of Nigeria's Qua Iboe crude.

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