Venezuela’s state oil company PDVSA is in talks with maritime firms seeking to buy and lease tankers in the face of a possible expansion of its exports, according to sources and a document seen by Reutersa sign that the country is hoping for relief from US sanctions on the oil sector.
Russia’s invasion of Ukraine has triggered a global search for new crude supplies, especially heavy oil produced by Venezuela.
A high-level meeting between US and Venezuelan officials in Caracas this month opened the doors for talks on sanctions imposed on PDVSA in 2019 that were later reinforced by former US President Donald Trump as part of his “maximum pressure” campaign to force the departure of President Nicolás Maduro from office.
The sanctions of the Trump administration led in 2020 to a total cut of the authorizations that allowed most of the foreign oil companies that participate in joint ventures with PDVSA to export. The suspension left companies including Chevron Corp CVX.N, Eni SpA ENI.MI and Repsol SA REP.MC with billions of dollars in unpaid dividends and debt that had previously been offset through shipments of Venezuelan crude.
Executives from PDVSA’s maritime arm, PDV Marina, and its Commerce and Supply division have recently met with firms offering ships. All the companies have been willing to accept Venezuelan crude or refined products as payment for the ships, said the sources who spoke on condition of anonymity.
“PDVSA’s tanker fleet has fallen short of any increase in oil production for both domestic refining and export,” a source said.
PDVSA did not respond to a request for comment.
depleted fleet
PDVSA’s aging fleet, made up of some 30 of its own tankers, has been forced to remain in Venezuelan waters after more than a decade of underinvestment and lack of repairs, according to sources and Refinitiv Eikon monitoring data.
US sanctions that prevent PDVSA from renewing the insurance and classification of its vessels, which certify that they are seaworthy, have in recent years reduced its ability to use ships for export.
That reduction has led PDVSA to rely more and more on a group of tankers owned by third parties, which often transport crude from Venezuelan ports, according to the sources and documents of the state company.
In one of the proposals seen by Reutersa company whose name was removed from the document, was offering five Aframax tankers, each capable of carrying up to 700,000 barrels, under a lease-to-purchase contract.
Under the proposal, PDVSA would pay a fee of $22,500 to $35,000 per day for up to 12 months to lease each vessel under a time charter contract.
Those ships would be progressively replaced by new ones, after the first year. The tankers to be built would be paid for by delivering some 4 million barrels of Venezuelan fuel oil, valued at 300 million dollars, according to the proposal.
The company has also proposed hiding PDVSA’s ownership of the new tankers through a chain of middlemen, which would reduce the risk of detentions or embargoes if US sanctions remain in place.
In 2020, PDVSA offered to include its own transport in some of its sales contracts, a strategy to help clients facing problems hiring vessels due to US sanctions, but the agreements were short-lived due to the insufficient availability of PDVSA vessels. .
That year the company also lost three of the four supertankers it had bought from China. And earlier this year he had to send a crew to rescue the fourth boat, stranded for weeks in Asia due to mechanical problems.
Between 2019 and 2020 Washington blacklisted owners and operators of vessels carrying PDVSA crude, but has not imposed similar maritime sanctions in the past year. Still, many shipping lines continue to avoid the South American country over sanctions, doubling freight costs for buyers of Venezuelan oil, forcing deep price discounts.
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