Venezuela To Accept More Crude Oil From Russia As Production Falters

Authored by Zainab Calcuttawala via OilPrice.com,

Russian crude oil exports to Venezuela are rising as Caracas struggles to produce enough crude to supply refineries in its contracted network, according to a new report by S&P Global Platts.

Russian Urals crude is now entering Venezuela at a rate of 335,000 barrels per day to supply PDVSA’s refinery in Curacao.

So far this year, Caracas has purchased 3 million barrels of Urals crude from Swiss trader Glencore.

Four tankers are scheduled to reach Curacao from Russian ports just this month, trading sources said.

PDVSA has been the contractual operator of Curacao for many years, but the contract is set to expire in 2019. Shell, the facility’s owner, has said PDVSA will not be the facility’s operator beyond the existing contract due to its failure to meet contractual obligations to perform upgrades.

According to OPEC’s Monthly Oil Market Report published this week, secondary sources - the ones the cartel uses to monitor compliance and official stats - pegged Venezuela’s crude oil production in January 2018 at 1.6 million bpd, down by 47,300 bpd compared to December 2017. This was the largest monthly decline in oil production among OPEC’s 14 member states. Venezuela, allowed to pump as much as 1.972 million bpd under the deal, surely did not make that cut voluntarily - its economy is collapsing and oil production has been in freefall for months now.

Venezuela, for its part, self-reported to OPEC that its oil production last month increased by 148,300 bpd over December to 1.769 million bpd.

Last week, a report by Reuters quoted internal documents that said PDVSA had restarted imports to its Isla Curacao facility after a seven-month hiatus as Venezuela tries to staunch the bleeding of its dwindling fuel output.

The credit ratings agency Moody’s sees “a negative feedback loop between declining production across all economic sectors, accelerating scarcity of hard currency, and an economic policy mix defined by price controls and forced discounting that exacerbate supply shortages and hyperinflation.”

Comments

MEFOBILLS Justin Case Tue, 02/13/2018 - 18:37 Permalink

Because Government programs almost always:
        waste a lot of money.
        don’t solve the problem they were designed to solve.
        create different problems in the process.
        require never-ending expansions in funding.
        never complete their task.

 

Your assignment Grasshopper is to explain Singapore, which doesn't waste a lot of money.  Yes, you said "almost always."  The problem is any complex system needs some sort of control mechanism.  You body has a brain and lots of feedback loops.

To many people think anarchy or libertarianism is the answer, when even a superficial glance at history proves these concepts sophomoric and failures.

Socialism works when it is a high trust, high IQ, highly homogenous society.  The population also has to be relatively free of psychopaths, and have high altruism.

In reply to by Justin Case

BarkingCat The_Juggernaut Tue, 02/13/2018 - 16:23 Permalink

The problem is easily remedied. They are just too stupid to think of it. 

If the Venezuelans are not able to run these then hire people with proven track record who can.

Hire a manager for from the EU or US or Canada for each facility. Let that manager hire his own crew. Pay them shitty base wage and then profit-sharing based on production.

Create the contract in such a way that the facilities must be brought up to good operating conditions from the income stream and then maintained there.

 

Hiring an expert crew will yield better results and cost a fraction of what it would cost to give a operating contract to a western company. 

 

...but that would be using real capitalism.  Difficult concept for a marxist bus driver.

In reply to by The_Juggernaut

thebigunit Tue, 02/13/2018 - 12:39 Permalink

I'd really like to hear Bernie Sander's explanation of the way that socialism works.

So far this year, Caracas has purchased 3 million barrels of Urals crude from Swiss trader Glencore.

Four tankers are scheduled to reach Curacao from Russian ports just this month, trading sources said.

Venezuela produces oil yet imports oil from the opposite side of the planet, And Venezuela's biggest export now seems to be its citizens.

https://www.wsj.com/articles/venezuelas-misery-fuels-migration-on-epic-…

Socialists are supposed to b really, really smart.  How does this make sense?

Expat thebigunit Tue, 02/13/2018 - 17:48 Permalink

And capitalists are apparently ignorant fuckwits who spout bullshit about anything they like because they feel so fucking superior.

You have no clue what the fuck you are even talking about, but I guess you are using alt-facts.  You probably don't even know where the Isla Refinery is.  Do you know which country Curacao is in?  Do you have the slightest fucking clue about the kind of crude oil the refinery runs? Do you have even a vague idea what kind of crude PDVSA produces?

No to all those questions.  You are talking out your ass. Making shhit up.  Fake news.  Bullshit.

Asshole.

In reply to by thebigunit

Benjamin123 Expat Wed, 02/14/2018 - 17:35 Permalink

PDVSA mainly produces two kinds of crude from two different regions. Lake Maracaibo oil is not at all like Orinoco bitumen, and most of the oil  production is from lake Maracaibo. The fields are not as big as the Orinoco but it forms the bulk of the production. It has been the center of the venezuelan oil industry since 1910, the orinoco heavy oil is a newcomer regardless of the size of the reserves.

I dont really know how the crudes from Barinas or Anzoategui are, these fields are small anyway.

In reply to by Expat

MusicIsYou Tue, 02/13/2018 - 12:54 Permalink

Russia should just go home and stay there since they won't fight the U.S anywhere besides Russia. There's no point in Russia going anywhere else then.

MusicIsYou Tue, 02/13/2018 - 12:57 Permalink

Russia couldn't possibly become another Empire because they won't fight hard anywhere besides Russia. You can't be that way and become an Empire, it just doesn't work.

BritBob Tue, 02/13/2018 - 13:38 Permalink

I though Venezuela had plenty of oil?  That's socialism for you and when you put an ex-bus driver in charge of an economy what do you expect?

oncemore1 Tue, 02/13/2018 - 14:27 Permalink

You cannot make it up!

Clinton=Glencore=Mark Rich (Marcel Reich) a person, who got presidential pardon 5 to 12. A business partner of Frank Giusta, and the circle is closed, we are at uranium deal.

A clear collusion with Russia from Klintons. And even colusion with Venezuela.

No single tid bit in the MSM?

abgary1 Tue, 02/13/2018 - 14:29 Permalink

Canada is having to import oil from the world even when they have excess production because Justin Turdeau and socialist bastards have killed the Energy East pipeline that would have supplied Canadian refineries with Canadian oil.

What fucking retards destroys the economy of the very jurisdiction they live in?

Canada is looking more like Venezuela everyday!

The government has started to intervene in  court decisions they don't like and controlling the media.

Canada is fucking a SOCIALIST SHIT HOLE BY ALL MEASURES!!!

Justin Turdeau and the federal liberal are fucking Marxist bastards that should be shipped to Venezuela where they belong.

Bemused Observer Tue, 02/13/2018 - 15:34 Permalink

Oh blah, blah, blah...These hyper-convoluted stories about why an apparently simple thing cannot be done have gotten old. ALL of the problems with this country are man-made, created solely out of the corruption and incompetence of PEOPLE.

Apparently they have refineries waiting on oil deliveries? Well, they're Venezuela, so this problem really should have self-corrected by now, no? I assume they already have the equipment in place, the workers have not all died, and no one has suggested the oil may have gone anywhere, right? SO PUMP IT OUT OF THE GROUND AND GET IT TO THE REFINERIES!!!

Yeah, we have to import it from Russia because it's so much cheaper to do that than to just pull it out of our OWN BACKYARD!...