Page 8 - LatAmOil Week 34 2022

LatAmOil VENEZUEL A LatAmOil

A byproduct from oil upgrading, petcoke is a were delivered in June and July at a discount of
highly affordable alternative to coal that can be $15-$20 per tonne. The only drawback to these
used to generate power, thereby enabling Indian arrangements was the 50-day wait for the ship-
companies to avoid surging coal prices. It is ment to arrive, he said.
more costly per tonne than coal, but it produces Since 2019, Venezuela’s oil sector has been
more energy when burnt and is often utilised by under sanctions from the US government.
cement companies. These restrictions have cut off many market
According to Ramco Cements’ CFO S. opportunities, but Venezuelan petroleum
Vaithiyanathan, the Venezuelan fuel has been a product exports have climbed since the Russian
worthwhile investment. “The quality of petcoke invasion of Ukraine, due partly to discounted
is very good, and it has very low sulphur,” he told petcoke prices.
the news agency last week. According to Indian cement companies,
So far, Vaithiyanathan said, the company Venezuelan petcoke is typically offered at prices
has purchased two 50,000-tonne cargoes that that are at a 5-10% discount below US prices. ™

US federal court issues opinion clearing

ConocoPhillips to collect arbitration award

THE US District Court for the District of pursuing a claim through the US federal court
Columbia has cleared one of the obstacles facing system.)
ConocoPhillips in its ongoing attempt to collect The matter is further complicated by certain
a $8.5bn arbitration award from the government executive orders issued in 2018 and 2019 by
of Venezuela. then-US President Donald Trump.
On August 19, Judge Carl Nichols issued an Those orders prohibit the sale of Venezue-
opinion that allows the US major to move for- lan state property in the US – including such
ward with collecting the award. In the opinion, assets as Citgo, a downstream operator that is
Nichols wrote that Venezuela’s government technically a subsidiary of Venezuela’s national
had not succeeded in defending its case before oil company (NOC) PdVSA, even though it is
the US federal court and noted that the World under the de facto control of an ad hoc board of
Bank’s International Centre for Settlement directors tied to Venezuela’s political opposition
of Investment Disputes (ICSID) had cleared in exile – and they have remained in force since
ConocoPhillips to go ahead with collection Trump’s successor Joe Biden took office in early
procedures. 2021.
The US major has been pursuing a claim As such, it remains to be seen how much con-
against Caracas since 2007, seeking compen- crete impact the new opinion will have. ™
sation for the latter’s expropriation of assets
known as Corocoro, Hamaca and Petrozuata
(all oil-bearing sections of the Orinoco Belt) in
that year.
In 2013, ICSID ruled in ConocoPhillips’
favour for the Hamaca and Petrozuata claims,
and in 2019, it fixed the size of the award. The
US federal court system then deferred to ICSID
later in 2019, giving ConocoPhillips a green
light to collect the award. However, the compa-
ny’s efforts foundered in the face of procedural
issues on ICSID’s part and objections from the
Venezuelan government.
Nichols’ opinion is apparently designed to
clear up the procedural issues. Nevertheless,
the US major is sure to face other obstacles,
not least among them the fact that it is one of
many creditors clamouring to collect a total of
around $60bn worth of debts from Venezuela,
which has limited resources to pay its creditors.
(Indeed, one of ConocoPhillips’ competitors for
access to Caracas’ resources, the now-defunct
Canadian mining company Crystallex, is also Hamaca and Petrozuata are sections of the oil-bearing Orinoco Belt (Image: Eni)

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