Guaido U.S. envoy vows to open oil deals, restructure debt

Venezuela’s government-in-waiting intends to scrap requirements that state-owned oil giant PDVSA keep a controlling stake in joint ventures as it seeks to revive the oil sector and encourage private investment, National Assembly leader Juan Guaido’s representative to the U.S. said.

The move is part of a broader plan by Guaido, who was declared interim president by the assembly last month, to revive Venezuela’s shattered economy by focusing on boosting oil output as soon as possible, said Carlos Vecchio, Guaido’s envoy in the U.S. Currently, PDVSA must have a 51% stake in all joint projects.

“We want to go to an open economy, we want to increase oil production,” Vecchio said in an interview Monday during a visit to Bloomberg’s Washington office. “The majority of the oil production that we want to increase will be with the private sector.”

Vecchio ruled out the possibility that Citgo, the U.S. refiner controlled by PDVSA, would file for bankruptcy, saying it was “not necessary.” He also mused about the possibility of the White House issuing an executive order protecting Venezuela from creditors as the U.S. once did for Iraq. Asked about the possibility, he called it a “good idea.”

“We want to keep the operation running” as it is now, Vecchio said of Citgo.

Vecchio has emerged as one of the most visible and vocal representatives for Guaido in the days since President Donald Trump declared Nicolas Maduro’s regime illegitimate and threw his weight behind Guaido on Jan. 23. The envoy said the top priority is restoring political stability, followed by rebuilding the economy. He said he hopes elections can be held by year-end.

Part of the economic challenge involves taking ownership of Venezuela’s assets abroad — for which Guaido declined to give a value — and gaining control of Citgo’s board. While he said Guaido’s government wants to name a new board, current employees of the company would continue to work there.

He also said he expects to have control of Venezuela’s embassy in Washington “this week.”

Falling Production

Venezuela faces considerable difficulty in rebuilding its oil industry after more than a decade of neglect and a history of hostility toward foreign investors. Venezuela’s oil output fell to a 69-year low of 1.339 MMbpd last year and is already expected to drop below the one-million barrel mark in 2019.

Vecchio said the government would honor all “legal” and “financial” debt, but left open the possibility that it wouldn’t honor debt agreements that Maduro’s regime signed under which it pays off creditors with oil. That would mainly hit China, which analysts say has lent the country about $70 billion, mostly against future deliveries of oil.

“If the signed deal was not approved by the National Assembly we will not recognize that,” Vecchio said. He said that Guaido’s team has yet to speak with officials from Russia, which continues to support the Maduro regime, or China, which has taken a more neutral stance so far.

Guaido’s case as Venezuela’s rightful leader gained new weight on Monday, with the U.S. State Department saying that he has been recognized as interim president by 16 more countries, including France, Germany and the U.K. Altogether, the department said, more than 40 countries have declared their support for Guaido.

Discussing Venezuela’s economic ties with Russia, China and Turkey, he suggested those countries would be wise to recognize that the political tide has turned against Maduro. “We hope they keep their neutrality in this moment,” he said. “That will facilitate our relationship in the future.”

Russia has emerged as Maduro’s key international ally in the days since Guaido declared himself leader.

Asked about Russia and Turkey, Vecchio said, “They need to understand that this need to be resolved for Venezuela, that 20 years is enough, that they can extend the agony — I’m referring to the Maduro regime — but never will it stop the change.”

By JOSE ENRIQUE ARRIOJA, NICK WADHAMS AND ANNA EDGERTON on 2/4/2019

Guyana could soon pump more oil than OPEC founder Venezuela

By MICHELLE KIM on 2/4/2019

(Bloomberg) — Guyana, a country that currently produces no crude, could pump more than OPEC member Venezuela in five years.

While U.S. sanctions on Venezuela threaten to accelerate an already steep slide in production, neighboring Guyana’s output is poised to reach 750,000 bopd by 2025, according to an estimate from ExxonMobil Corp. The oil major has partnered with Hess Corp. and China’s CNOOC Ltd. to develop one of the world’s biggest new deepwater oil discoveries off the country’s coast.

The potential gusher comes as Venezuela’s production plunges amid an economic crisis and U.S. sanctions targeting the country’s oil sector. Venezuelan output has declined almost 50% over the past three years, according to data compiled by Bloomberg. If sanctions compel U.S. oil companies to wind down their business in the Latin American nation, production could sink to 600,000 bpd, according to Rapidan Energy Group.

Even in the event of a speedy political resolution, production will probably fall to 890,000 bpd in 2019 due to “an extraordinarily deteriorated industry that is short on expertise and direction,” said Mara Roberts Duque, a BMI Research analyst based in New York. Still, Venezuela has far more production capacity than Guyana. If the country stabilizes and repairs its oil sector, it’s unlikely that Guyana would surpass it, she said.

Meanwhile, Venezuelan President Nicolas Maduro has threatened to stymie development of the oil play, vowing to block Exxon from exploring in contested waters off Guyana. ExxonMobil is in talks with Guyana’s government on the matter, chief executive Darren Woods said in an earnings call Friday.

U.S. oil refiners cut off from  crude after sanctions

By JENNIFER A. DLOUHY on 2/4/2019

(Bloomberg) — U.S. oil refiners won’t be allowed to complete shipments of Venezuelan crude they booked before the Trump administration slapped new sanctions on the Latin American nation.

U.S. Treasury Department officials have informed some companies that previously contracted cargoes won’t be exempt from a new rule blocking payments to Venezuela’s PDVSA, according to two people familiar with the matter. The requirement forces purchasers of Venezuelan crude to deposit payment into an account state-owned Petroleos de Venezuela SA can’t touch.

The clarification puts refiners in a difficult position, as PDVSA is now demanding up-front payment before releasing any tankers bound for the U.S. But under the Trump administration’s Jan. 28 sanctions, U.S. companies are barred from doing business with PDVSA.

Two vessels contracted for Valero Energy and one belonging to Chevron are anchored in Venezuela, awaiting payment. A fourth tanker booked by Chevron may be rerouted without getting the oil it came for, according to tanker tracking data compiled by Bloomberg.

For days, refiners had asked the Treasury Department to issue some clarification on the new sanctions, including assurances freeing them to pay PDVSA for transactions arranged before the restrictions were imposed. Officials now insist that payment for those previously booked cargoes go into the special account, even for deals with different payment terms inked prior to the imposition of sanctions on Jan. 28, said the people, who asked for anonymity to discuss the matter.

Newly released Treasury Department guidance did not include language allowing payment to PDVSA for earlier crude transactions. Representatives of the Treasury Department did not immediately respond to an email seeking comment.

The move illustrates uncertainty over the intricacies of the sanctions while the Trump administration tries “to write the playbook” governing them, said Scott Modell, managing director of Rapidan Energy Group.

It’s unclear whether U.S. refiners will actually be able to buy any Venezuelan crude during a “wind-down” period that allows those sales through April 28 — but only if payments go to the special account.

Sanctions Uncertainty

“I have not heard anybody walk away with a crystal-clear idea as to how they are going to proceed in the coming months,” Modell said. The administration is moving fast, both “figuring out its next moves, and, at the same time, taking a breather and working with people in the industry to explain what they just did.”

A Valero spokeswoman did not respond to a request seeking comment. Chevron spokesman Braden Reddall said the company does not comment on supply and trading matters.

The effect of the sanctions was immediate, as Gulf Coast refiners scrambled to find alternative supplies of heavy crude. Meanwhile, companies halted plans to sell petroleum products to Venezuela, including diluents used to facilitate pipeline shipment in the country. On Tuesday, one petroleum-loaded tanker bound for the Latin American country did a U-turn in the Gulf of Mexico.

Venezuela oil sanctions working to pressure Maduro, Mnuchin says

By JENNIFER EPSTEIN AND TERRENCE DOPP on 2/6/2019

WASHINGTON (Bloomberg) — Treasury Secretary Steven Mnuchin said U.S.-imposed oil sanctions are putting pressure on the embattled Venezuelan President Nicolas Maduro, who the U.S. is trying to oust.

“We’ve been turning the heat up on the regime,” Mnuchin said Wednesday, touting the effectiveness of fresh sanctions that President Donald Trump’s administration imposed Jan. 28. “I think they’re working.”

The U.S. has struck the “right balance” to meet U.S. market needs and all options and “are on the table” going forward, Mnuchin told reporters outside the White House. Venezuela’s oil exports fell to a 10-month low in January following new sanctions on the nation’s state-owned oil company Petroleos de Venezuela SA that effectively block Maduro’s regime from exporting crude to the U.S.

The move ratcheted up pressure on Maduro to cede power to National Assembly leader Juan Guaido, who the U.S. and European allies have recognized as Venezuela’s rightful president.

Oil companies still scrambling to find alternative supplies of heavy crude — and raising the specter of production cuts — have privately argued the administration has not found the right balance nor approved options that would help relieve pressure on refineries. For instance, Treasury officials rejected refiners’ pleas to allow them to complete oil transactions that were contracted before sanctions were imposed without paying into a special account walled off from Maduro.

Pirates of the Caribbean: Venezuelans stalking open seas as socialist economy collapses

Fishermen from Trinidad are under threat from marauding pirates and the corrupt Venezuelan coast guard .  With rich Caribbean fishing grounds on their doorstep, the villagers of Cedros in Trinidad are never short of fishermen’s tales to tell.

The latest stories to do the rounds though, are not about record-breaking hauls of kingfish. Today the fishermen themselves have become the catch.

“I was out picking up my nets late one afternoon when a boatload of armed men came at me at full speed,” said Brian Austin, 54. “From about 200 metres away they started firing shots around my boat – it was terrifying. Luckily, I have a high-powered engine, so I managed to speed off, but they took my nets and all the fish in them.”

On that occasion, Mr Austin was the one that got away. Other local fishermen tell tales…

PIRACY STRANGLING TRADE BETWEEN T&T,Venezuela

by Radhica De Silva
Fri Feb 08 2019

Michael Jawahir

The an­i­mal trade is de­clin­ing as pira­cy threatens il­le­gal trade of wildlife be­tween Trinidad and To­ba­go and Venezuela trig­gering a short­age of trop­i­cal birds such as par­rots and macaws. Con­tra­band traders al­so import mon­keys, agouti, lappe, tat­too, deer, wild hog, igua­na, hors­es, goats, sheep, cat­tle, pro­vi­sions and food­. Trained bullfinch­es and pi­coplats are sold for up to TT$25,000 each in T&T.

Trad­e in guns, drugs, hon­ey and women flour­ishes un­der the noses of the Venezuela’s Guardia Na­cional, T&T Coast Guard and armed pi­rate gangs op­er­ating out of Guiria and Tu­cu­pi­ta, two of the near­est towns in Venezuela. One large gang is based on the Caño Man­amo Riv­er, a trib­u­tary of the Orinoco Riv­er. It branch­es north­wards from the Orinoco to the west­ern edge of the Orinoco Delta, be­fore enter­ing the Gulf of Paria. Tu­cu­pi­ta, the cap­i­tal of Delta Amacuro state, lies on the east bank of the Caño Man­amo, a spawn­ing ground rich in fish and shrimp, for which ­ Trinidad fish­er­men ex­change food and oth­er com­modi­ties, risking kidnap. One gang leader known to In­ter­pol and the Guardia Na­cional, re­cruit­ed des­per­ate Venezue­lans who are forced in­to ban­dit­ry to earn liveli­hoods by taxing all who en­ter their riv­er, bribing the Guardia Na­cional who al­lows the criminals to charge this tax. Fer­ry ownerrs were forced to aban­don op­er­a­tions be­cause of the pi­rates.