New Post on the Venezuela Upgrader Grab – Exxon gets Ruling to freeze $375 million PDVSA assets & Chavez strikes back cutting oil sales to them. Both ConocoPhillips & Exxon continue to express a willingness to negotiate the loss of their assets. But they are also starting to take action to help the process along.
Don’t you love it when the good guys get to score one – and actually get some support from both courts & IEA startegic reserves. This also speaks volumes about the international opinion of Chavez’s actions where there is a long history of counting the true asset of any man or country to be in the honoring of its contracts or word.
Good article by bloomberg – it catches that any action like this that Chavez takes will hurt him & his countries revenue more than his customer and that while the volumes are important they can be darwfed by the size of new fields like the BP one stated, that are coming online (ie -50MBD cut Exxon, BP new field +200MBD).
Never get Crazy mixed up with Stupid however……. Chavez has been selling VLCC cargoes to China that was part of his 300MB/year contract, and placing some of it as Fuel Oil sales. Some of the original Upgrader JV Crude sales had linkage to HFO market or was priced close to the 75% WTI values that trend USGC No.6 3%S prices.
Today with No.6 approaching 80-85% WTI which is also at record prices may netback better values. And while China does not have the refining capacity to utilize all the heavy crude they do have a butt load of ships needing bunkers as they import feedstocks & export products.