Refining Community Logo

RE: PDVSA Stops Sales Oil Exxon Update3


Charles Randall

Here is Update (4) on Exxon Chalmette vs PDVSA asset freeze – Crude cargoes rejected by XOM
Venezuela, Exxon in refinery supply talks
CARACAS (Reuters) 3/01/08 – Venezuela is in talks with Exxon Mobil over supplies to the Chalmette refinery, the oil minister said on Friday, amid an escalating legal battle between the OPEC nation and the U.S. oil giant.
Venezuela cut commercial ties to Exxon after it won court orders freezing up to $12 billion (6 billion pounds) in Venezuela’s assets but promised to honor a supply contract with Chalmette — a joint venture between Exxon and Venezuelan state oil company PDVSA located in the U.S. state of Louisiana.
There has been, with respect to the Chalmette refinery, the intention by Exxon to ignore the supply contracts — an issue we are discussing,” Ramirez told reporters.
An industry source told Reuters that Exxon had rejected several cargoes from the Petro Monagas heavy oil project, formerly the Cerro Negro heavy crude upgrader that Exxon ran until its nationalization last year.
“A couple of cargoes have been pushed back for not meeting the quality specification,” said the source, who spoke on condition of anonymity. He said Chalmette, which receives most of its crude from the Petro Monagas project, was receiving less than it normally does from the project.
But he said this may have been related to maintenance at the 192,000-barrel-per-day Chalmette, which in January began two months of planned maintenance to add new environmental controls.
The cargo rejections do not necessarily reflect operational problems at Petro Monagas, the source added, because PDVSA may have incorrectly described the specifications of the crude being offered.
Exxon has filed two arbitration suits seeking at least $5 billion in compensation for Venezuela’s takeover Cerro Negro as part of leftist President Hugo Chavez’s nationalization crusade meant to advance his self-styled socialist revolution.
PDVSA is challenging a London court order on the temporary asset freeze, arguing the move was “weird” and based on “fantasy. “Venezuela’s deputy energy minister has told local media that the government has considered offering its stake in Chalmette as compensation for Cerro Negro assets.
(Reporting by Brian Ellsworth; Editing by Christian Wiessner)

Refining Community