Page 5 - LatAmOil Week 41 2022
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LatAmOil                                     COMMENTARY                                            LatAmOil


                         The volumes involved have dropped even more   turn out enough fuel to meet domestic demand,
                         sharply in the last three years. This is in large   not just because of the decline in Venezuela’s oil
                         part the result of the US sanctions imposed in   production levels but also because PdVSA has
                         early 2019, which have sought to discourage   not been able to carry out all necessary repair
                         international oil companies (IOCs) and other   and maintenance work.
                         stakeholders in the global energy industry from   Once again, this is related to sanctions,
                         investing in or otherwise supporting Venezuela’s   which have curtailed the NOC’s ability to work
                         petroleum industry.                  with its upstream partners while also prevent-
                           Officials in Caracas are reportedly eager to   ing it from accessing the parts, equipment and
                         breathe new life into the group, though. A source   technical expertise needed to repair refineries,
                         with knowledge of the matter told Bloomberg   heavy crude upgraders, pipelines and other
                         last week that PdVSA, in a bid to revive Petrocar-  infrastructure.
                         ibe, had started lobbying a number of Caribbean   Venezuela has been able to reduce the impact   xxxx
                         island states to negotiate deals for new oil and   of the sanctions regime on this front by signing
                         fuel shipments.                      a series of agreements with Iran. Under these
                           The source did not name the states that were   agreements, the first of which was finalised in
                         being targeted or the terms that were being   November 2021, Tehran has been furnishing
                         discussed. However, Bloomberg quoted Ralph   PdVSA with some of the things it needs most.
                         Gonsalves, the prime minister of Saint Vincent   They include technical expertise, refinery
                         and the Grenadines, as saying that he expected   equipment, petroleum product and lightweight
                         PdVSA to deliver its first new shipment of fuel   blendstocks such as gas condensate that can be
                         under the Petrocaribe programme to the coun-  mixed with Venezuelan heavy crude to make it
                         try by the end of October. The cargo will consist   easier to process or export.
                         of up to 23,000 tonnes of diesel, said Gonsalves,
                         who has made it clear that he supports Venezue-  Sanctions: The heart of the matter
                         la’s socialist aspirations.          Even so, the South American country’s oil sector
                           Maduro, for his part, has also played up Pet-  is still precarious. Crude production levels are
                         rocaribe’s role as a vehicle for Chavez-style social   rising, but fuel shortages and supply disruptions
                         spending beyond Venezuela’s borders. “Sooner   remain widespread.
                         rather than later we will recover Petrocaribe’s   Under such conditions, it is difficult to see
                         investment capacity so that it fulfils its historic   how Caracas might successfully revive the
                         role as a factor of social justice and stability in   Petrocaribe programme, since doing so would
                         Latin America and the Caribbean,” he said ear-  hinge on PdVSA’s ability to serve as a reliable
                         lier this year.                      supplier of crude oil and refined fuels. At the
                                                              same time, though, it is easy to see why cash-
                         Ambitions vs. ability                strapped Caracas might be as interested now as it
                         These are lofty sentiments, but PdVSA will   has ever been in collecting the debts owed by the
                         probably be hard-pressed to back them up with   Petrocaribe group’s member states. (According
                         action unless US sanctions are lifted – or loos-  to the Bloomberg report, the arrears amounted
                         ened sufficiently to permit oil exports to resume.   to $6.5bn as of 2019.)
                         After all, Venezuela’s ability to export crude oil   Whatever the case, the statements from the
                         and refined fuels is still severely constrained as a   news agency’s source indicates that PdVSA
                         consequence of the sanctions regime, so PdVSA   wants conditions to change soon and is ready to
                         is likely to face at least moderate difficulties in   make promises to members of the Petrocaribe
                         trying to arrange additional tanker shipments,   group. Nevertheless, the NOC’s ability to uphold
                         even to nearby countries.            its pledges will continue to disappoint unless the
                           Additionally, Venezuela’s refining sector is   US government makes a decision to loosen or
                         seriously compromised. It is currently unable to   lift sanctions. ™
























                                        Left to right: Maduro and Gonsalves admire a portrait of Chavez (Photo: Twitter/VTVcanal8)



       Week 41   12•October•2022                www. NEWSBASE .com                                              P5
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