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The First Oil-Exporting Casualty Of The Crude Carnage: Venezuela

In the aftermath of OPEC’s failure to cut oil production, Russia has been acting surprisingly sanguine, perhaps as a result of less leverage in its system as compared to America’s own high yield-funded shale complex – now that it is a race to who will default first and be forced to take production offline – with Putin today saying “Russia will cope with the rout in crude oil”,  and adding that “we are satisfied overall with the situation and do not see anything so extraordinary in what is happening. Winter is coming and I am sure that the market will come into balance again in the first quarter or toward the middle of next year.” Maybe it will, or maybe not, if indeed as those with a working frontal cortex suggest the plunge in crude prices is merely a function of a collapse in global demand now that the […]

Posted On : Published By : Tom Whipple
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ConocoPhillips Asks Judge to Probe Secret Citgo Sale

(Updates with arbitration details in fifth paragraph.) Nov. 26 (Bloomberg) –- ConocoPhillips (COP) Petrozuata BV asked a Texas judge to let it investigate claims Venezuela ’s state-owned oil company is secretly liquidating U.S. assets to avoid paying a potential multibillion-dollar arbitration award over the nationalization of ConocoPhillips’ assets in 2007. Petroleos de Venezuela ’s principal U.S. asset is Houston-based Citgo Petroleum Corp., which owns three refineries and a distribution network comprised of numerous pipelines and terminals. The Venezuelan government publicly said in September and October that it was no longer trying to sell Citgo, in deals with price tags estimated from $7 billion to $15 billion, according to court papers. “The available evidence indicates that PDVSA is liquidating its interests in Citgo to remove the proceeds from the United States to Venezuela or elsewhere with the specific intent to hinder, delay or defraud its creditors,” including the company’s “ability […]

Posted On : Published By : Tom Whipple
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Oil Diplomacy Takes New Twist as Venezuela Seeks Non-OPEC Help

Venezuela is seeking help from nations outside of OPEC to halt a collapse in global crude prices, adding a new twist to oil-market diplomacy with nine days to go until the group’s next meeting. Nicolas Maduro, Venezuela’s president, told state television yesterday that he was coordinating with Russia to hold a meeting “very soon” with countries that aren’t members of the Organization of Petroleum Exporting Countries, as well as those within the group, to defend the price of oil. Venezuela and other Latin American countries have been among the hardest hit by plunging prices in part because the slump has been caused by surging supplies in North America. Combined output from the U.S. and Canada rose last year to the highest since at least 1965 as producers tapped stores locked in shale-rock formations and oil sands, according to BP Plc data. “I don’t see anyone in non-OPEC volunteering to […]

Posted On : Published By : Tom Whipple
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With goods scarce in Caracas’s stores, street sales boom and officials glower

Milagro Alvarez holds her 5-month-old daughter, Annabeth, as she waits in line inside a Farmatodo pharmacy in hopes of buying more disposable diapers in downtown Caracas, Venezuela. The store refused to sell her diapers because of a government rationing system that allows her to buy only two packages of 20 diapers per week. (Ariana Cubillos/AP) CARACAS, Venezuela — The sprawling street market that radiates outward from the metro station in Petare, Caracas’s largest slum, is the retail equivalent of an anti-Target. There’s no organization to it. Tube socks and school supplies are sold beside giant pyramids of pineapple and piled yucca. Leopard-print hot pants stretch over mannequin buttocks next to the stinky stalls of fishmongers. The bazaar was known until this month as one of the city’s biggest open-air black markets, the place to find all the scarce items that shoppers must queue up for hours to get in […]

Posted On : Published By : Tom Whipple
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Oil Price a Concern Says Venezuela as Al-Naimi Visits

The price of oil is a “concern for everyone,” Venezuela ’s representative to OPEC said after a meeting with Saudi Arabia’s oil minister yesterday. Rafael Ramirez, who is also Venezuela’s foreign minister, told reporters at a climate-change conference on Margarita Island that Saudi Arabia’s participation at the event was part of a meeting between friends. The Middle East nation is the biggest producer in the Organization Of Petroleum Exporting Countries, a 12-member group responsible for about 40 percent of the world’s oil supply. Brent crude has collapsed to the lowest level in more than four years amid speculation that global supply is outpacing demand. OPEC’s leading producers are responding by cutting prices, resisting calls to reduce supply as they compete with the highest U.S. output in three decades. Ramirez greeted Saudi Arabia’s Ali Al-Naimi as he arrived at the event before they began a private meeting, stopping briefly for […]

Posted On : Published By : Tom Whipple
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Venezuela Scraps Plans to Sell U.S. Refining Arm Citgo Petroleum

Venezuela shelved a planned sale of about $10 billion in U.S. refineries as surging North American crude output pushes down energy prices and profit margins. The country ruled out selling its U.S.-based refining subsidiary Citgo Petroleum Corp., Finance minister Rodolfo Marco Torres told Caracas-based El Universal in an interview published yesterday. The nation will keep investing in Citgo, he said, echoing comments made by President Nicolas Maduro last month. Citgo said in a July 29 filing that state-owned oil company Petroleos de Venezuela SA was looking for a buyer, threatening to undermine bondholders and other creditors by removing a sovereign asset that could be seized in the U.S. in the event of a default. Former oil minister Rafael Ramirez said in August that Citgo was worth at least $10 billion, while Barclays Plc said last month that the company’s equity value is between $7 billion and $9 billion. “Refining […]

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Venezuela blames U.S for global oil price slump

CARACAS, Oct. 16 (Xinhua) — Venezuelan President Nicolas Maduro on Thursday blamed Washington for the slump in global oil prices. Washington is "flooding" the market with cheaper shale oil to bring down prices and ultimately impact Russia and other oil-producing nations, Maduro said at a televised Cabinet meeting. "The U.S. and its allies want to affect oil prices to harm Russia, which produces around 10 million barrels per day, and that is the vital income of their economy," said Maduro. Market analysts say a 20-percent dip in oil prices since June is driven by lower economic growth and weak demand for crude in Europe, along with signs that the core Gulf members of the Organization of Petroleum Exporting Countries are in no hurry to cut production. Maduro called for an extraordinary meeting of the group to explore ways to stabilize international oil prices.

Posted On : Published By : Tom Whipple