Page 11 - LatAmOil Week 15 2020

LatAmOil VENEZUELA LatAmOil
Venezuela is on the verge of the worst gasoline shortages in more than a decade (Image: FEE.org)
 Caracas has not yet said whether it intends to follow the Oil Chamber’s advice, but if it does, existing policies may prove to be an obstacle. The government subsidises fuel prices to such an extent that gasoline is virtually free in Venezuela. As a result, private companies would have a diffi- cult time turning a profit, even if restrictions on imports were lifted.
Meanwhile, there are also regulations that constrain private fuel companies. For example, a law dating back to 2008 reserves the right to engage in activities associated with liquid fuel supplies to the state.
Gasoline and other refined petroleum
products have become increasingly scarce in Venezuela. Since PdVSA’s cash-strapped refin- eries have been running at less than 10% of capacity in recent weeks, the country has been experiencing severe fuel shortages. In turn, the lack of fuel has wreaked havoc on efforts to transport food into cities, according to Reuters.
Since late last year, US officials have sought to discourage most of Venezuela’s foreign fuel suppliers from sending gasoline to the country. Washington has done so in the hope of ousting Maduro, a socialist, from his position as head of the crisis-stricken Latin American country’s government. ™
GUYANA
Guyana sees oil production hitting maximum but revenues falling
THE government of Guyana has said that oil production is set to reach maximum levels of 120,000 barrels per day (bpd) next month as anticipated, but it has also warned that per-bar- rel revenues are set to decline.
Thanks to rising output levels, Guyana will be able to export its next batch of oil in May. But this lift is likely earn considerable less than the sum of US$55mn received for the first million barrels because of current market conditions, according to Mark Bynoe, the director of the country’s Department of Energy.
Bynoe told Stabroek News, a local daily, that the Department of Energy was currently work- ing to determine the extent to which the recent decline in oil prices and worldwide energy demand could affect Guyana’s GDP. Officials in Georgetown had predicted that the country’s GDP would grow by 86% this year, he noted.
He went on to say that Guyana had decided against hedging its five lifts planned for 2020. Instead, he stated, the country continue to will sell its share of production at current-day prices, until it finds a marketing agent for future shipments.
Last year, Guyana started to sell its share of crude via open-market tenders, since it has no refining capacity. The first 1mn barrels of oil from Liza, a field within the ExxonMobil-op- erated Stabroek block, was sold to Royal Dutch Shell (UK/Netherlands).
The government began its search for a mar- keting agent in March, saying it needed a partner that was capable of lifting around five cargoes of around 1mn barrels each per year. At the time, it said it was ready to award a 12-month contract to a company with at least five years of experi- ence in oil marketing and trading.
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