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ConocoPhillips Has Seized Venezuela PDVSA Products From Isla refinery: Curacao

WARNING SIGNS: A warning sign stands at the entrance of the PDVSA/BOPEC Brasil Terminal in Rincon Bonaire on the Caribbean Netherlands island of Bonaire, Monday, May 7, 2018, where Venezuela refines and stores its heavy crude. U.S. oil giant ConocoPhillips is pressing for control of Venezuela’s key offshore operations in the Caribbean, seeking to recoup $2 billion from a decade-old dispute. (Stephan Kogelman/Associated Press)

WILLEMSTAD — U.S. oil major ConocoPhillips (COP.N) has seized products belonging to Venezuelan state oil company from the Isla refinery it runs on Curacao, an island official told Reuters on Sunday.

Conoco has won court orders allowing it to seize PDVSA assets on Caribbean islands, including Curacao, in efforts to collect on a $2 billion arbitral award linked to the 2007 nationalization of Conoco assets under late leader Hugo Chavez.

“PDVSA products from the installations of the Isla refinery have been confiscated. We don’t have any way to get them,” said Steven Martina, Curacao’s minister for economic development, who did not provide the amount or value of the seized products.

Conoco and PDVSA did not immediately respond to requests for comment.

Martina added that Curacao was planning to meet with PDVSA and Conoco this week to discuss the dispute that has led Conoco to seize Venezuelan assets in the Caribbean, wreaking havoc on PDVSA’s export chain.

The dispute has also caused worry on Curacao, a constituent country within the kingdom of the Netherlands with a vibrant tourism industry and deep-water ports used by the oil industry. The island is heavily dependent on the refinery, which provides as much as 10 percent of Curacao’s gross domestic product and is a big source of employment on the island just off Venezuela.

“There is no need to be alarmed, fuel and services are guaranteed,” Curacao’s Prime Minister Eugene Rhuggenaath said in a news conference on Sunday. He added that lawyers are also contacting Conoco to “reach a deal and negotiate.”

PDVSA is preparing to shut a Caribbean refinery that is running out of crude amid threats by Conoco to seize cargoes sent to resupply the facility, two sources with knowledge of the situation told Reuters on Friday.

But Martina said the 335,000 barrel-per-day Isla refinery was still operating, albeit at low levels, thanks to Curacao’s reserves.

Meanwhile, ConocoPhillips says it is nowhere close to recouping the value of a $2 billion arbitration award against Venezuelan state oil company PDVSA, its chief executive said today.

Conoco has won court orders allowing it to begin seizing PDVSA assets in efforts to collect on the award by the International Chamber of Commerce (ICC) over the 2007 nationalization of its projects in Venezuela.

While it seized some assets earlier this month, Conoco is clearly telegraphing that it intends to escalate its campaign against PDVSA across the globe as it works to recoup its losses. That threatens to further limit revenue at the state-controlled firm, the single largest moneymaker for the OPEC-member nation.

“It’s not close to the $2 billion today, but over time we expect to be able to recover it,” CEO Ryan Lance said at the company’s annual shareholder meeting in Houston. “We’re just trying to look where all the assets are.”

Conoco has filed with courts in the United States, Hong Kong, the United Kingdom and throughout the Caribbean in an attempt to begin the legal process of seizing additional PDVSA assets, said Lance.

Conoco has had early success in some Dutch regions of the Caribbean due to specific legal statutes, though other jurisdictions are expected to take longer, Lance said.

The moves have disrupted fuel deliveries throughout the Caribbean, much of which depends on PDVSA.

“We’re trying to minimize any impact that this might have on the islands in the Caribbean,” Lance said. “We are concerned about putting them in the middle of this thing, between PDVSA and ourselves.”

Houston-based Conoco has two other outstanding arbitration awards against PDVSA.

Shares of the company were up about 0.6 percent at $70.06 in trading late this morning.

PDVSA’s liabilities are why St. Croix’s HOVENSA, a joint venture with the Venezuela’s state-owned oil company, closed down suddenly in January of 2012.

(REUTERS)

To read more:

https://oilprice.com/Energy/Energy-General/ConocoPhillips-Moves-To-Seize-Venezuelan-Oil-Assets.html

http://www.miamiherald.com/latest-news/article210820589.html

 

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John McCarthy

John McCarthy

John McCarthy has been reporting on the U.S. Virgin Islands since 1989. He is originally from Detroit, Michigan.

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