Latest market news

Colombia, Venezuela locked in vitriol over frontier

  • Market: Crude oil, Oil products
  • 30/09/19

Colombia and Venezuela today exchanged heated recriminations over non-state armed groups thriving along their long and porous border, a potential flashpoint in a protracted struggle for political power in Caracas.

Colombia's defense minister Guillermo Botero, foreign minister Carlos Holmes Trujillo, the military high command and head of the national police summoned the media early today to lay out evidence they say proves that Venezuela is harboring and coordinating with the National Liberation Army (ELN) and other Colombian insurgents to plot attacks against the Colombian state.

Letters, photographs and videos unveiled today purport to show Colombian fugitives site-seeing, arranging medical care and coordinating training with political authorities in Venezuela, including former Zulia state governor Francisco Arias Cardenas, who is now Venezuela's ambassador to Mexico, a country which espouses non-intervention in Venezuelan affairs.

Colombia alleges that the ELN has at least 36 camps, 10 support networks, four financial areas and multiple clandestine airstrips across the border in Venezuela from where it manages drug trafficking and money-laundering operations.

The presentation came on the heels of Colombian president Ivan Duque's submission of a dossier of secret evidence on the matter to the UN last week. Although the document has not been made public, four of the photographs were later found to be of Colombian territory, not Venezuela. The head of intelligence for the armed forces, brigadier general Oswaldo Pena Bermeo, took responsibility for the error and resigned today.

"Criminal complicity between the Venezuelan regime and the terrorists is a fact," Botero said. "Venezuela is a sanctuary for them, they get health care, they have bank accounts and they own property, with absolutely nothing done by the authorities there. From there they plan and carry out attacks on people and strategic assets in Colombia."

Venezuelan president Nicolas Maduro, who is not recognized by Colombia, the US and most other Western countries as the country's legitimate head of state, seized on the spurious evidence to reiterate his denial of the accusations of support for Colombian armed groups. In a press conference in Caracas today, he blamed Bogota for failing to tackle coca production and the armed groups that he said have sown lawlessness on the border, where he vowed to beef up security.

Maduro denounced the recent revival of the 1947 Inter-American Treaty of Reciprocal Assistance, better known as the Rio Treaty or its Spanish acronym TIAR, which Venezuela's opposition is hoping will encourage regional sanctions on Caracas and lay the groundwork for possible military intervention. "The TIAR will never be applied in Venezuela," Maduro declared, denouncing Duque and US president Donald Trump for allegedly fabricating evidence against his government. He also revived a recent controversy over photographs of Guaido alongside Colombian criminals, allegedly taken in February when he crossed into Colombian territory for a high-profile aid concert on the border. Guaido has said the men were strangers encountered along the informal border crossing.

Border disorder

The 2,200km border has long been a focal point of violence and smuggling of a range of goods, especially cheap Venezuelan fuel into Colombia where pump prices are closer to market rates. Colombian state-controlled Ecopetrol's Cano Limon-Covenas crude pipeline that runs along the border is an enduring target for bombings and illicit valves installed by armed groups such as the ELN and the former Farc group, which signed a peace deal with the the Colombian government in 2016. Farc dissidents are among the groups widely believed to have taken refuge in Venezuela.

In recent years, throngs of Venezuelan migrants have crossed into Colombia in search of food, medicine and jobs that have dried up in Venezuela. Close to 5mn migrants have fled Venezuela, with at least 1.5mn in Colombia alone, according to official data that likely underestimates the phenomenon.

Bogota is on the frontlines of a US-led international campaign to unseat Maduro in favor of Juan Guaido, the head of Venezuela's opposition-controlled National Assembly who declared an interim presidency in January 2019. Since then, he and his mentor, the former political prisoner Leopoldo Lopez now holed up in the Spanish diplomatic residence in Caracas, are seeking to build up a government in exile, in anticipation of taking power once Maduro is forced out. The most prominent member of the parallel administration, Harvard professor Ricardo Hausmann, stepped down last week.

The US maintains a skeleton diplomatic body in exile, dubbed the Venezuela Affairs Unit, at its sizable embassy in Bogota from where it monitors developments and helps to coordinate aid for the fledgling parallel government. The White House issued new sanctions guidance today, effectively extending a wind-down period for holders of Venezuelan bonds from 30 September to the end of March 2020, a narrow offshoot of its suite of financial and oil sanctions on Venezuela.

In his press conference this morning, Maduro reiterated a call to renegotiate all Venezuelan debt, an initiative that the country's broad array of creditors — including Wall Street investors, arbitration claimants, and Russian and Chinese oil-backed lenders, do not take seriously.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
19/09/24

LNG-burning vessels well positioned ahead of 2025

LNG-burning vessels well positioned ahead of 2025

New York, 19 September (Argus) — Vessels outfitted with dual-fuel LNG-burning engines are poised to have the lowest marine fuel expense heading into 2025 when the EU will tighten its marine EU emissions trading system (ETS) regulations and add a new regulation, " FuelEU", from 1 January 2025. Considering both regulations, at current price levels, fossil LNG (also known as grey LNG) will be priced the cheapest compared with conventional marine fuels and other commonly considered alternative fuels such as biodiesel and methanol. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. The FuelEU GHG intensity maximum is set at 85.69 grams of CO2-equivalent per MJ (gCO2e/MJ) from 2030 to 2034, dropping to 77.94 gCO2e/MJ in 2035. Vessel pools exceeding the FuelEU's limits will be fined €2,400/t ($2,675/t) of very low-sulphur fuel oil (VLFSO) energy equivalent. GHG emissions from grey LNG vary depending on the type of marine engine used to burn the LNG, but ranges from about 76.3-92.3 gCO2e/MJ, according to non-governmental environmental lobby group Transport & Environment. This makes a number of LNG-burning, ocean-going vessels compliant with FuelEU regulation through 2034. The EU's ETS for marine shipping commenced this year and requires that ship operators pay for 40pc of their GHG generated on voyages within, in and out of the EU. Next year, the EU ETS emissions limit will increase to 70pc. Even with the added 70pc CO2 emissions cost, US Gulf coast grey LNG was assessed at $639/t VLSFOe, compared with the second cheapest VLSFO at $689/t, B30 biodiesel at $922/t and grey methanol at $931/t VLSFOe average from 1-18 September (see chart). "In 2025, we expect [US natural gas] prices to rise as [US] LNG exports increase while domestic consumption and production remain relatively flat for much of the year," says the US Energy Information Administration. "We forecast the Henry Hub price to average around $2.20/million British thermal units (mmBtu) in 2024 and $3.10/mmBtu in 2025." Provided that prices of biodiesel and methanol remain relatively flat, the projected EIA US 2025 LNG price gains would not affect LNG's price ranking, keeping it the cheapest alternative marine fuel option for ship owners traveling between the US Gulf coast and Europe. LNG for bunkering global consumption from vessels 5,000 gross tonnes and over reached 12.9mn t in 2023, according to the International Maritime Organization (IMO), up from 11mn t in 2022 and 12.6mn t in 2021. The maritime port authority of Singapore reported 111,000t of LNG bunker sales and the port authorities of Rotterdam and Antwerp reported 319,000t in 2023 from all size vessels. Among vessels 5,000 gross tonnes and over, LNG carriers accounted for 89pc of LNG bunker demand globally, followed by container ships at 3.6pc, according to the IMO. The large gap between LNG global and LNG Singapore, Rotterdam, and Antwerp bunker demand, is likely the result of most of the demand taking place at the biggest LNG export locations where LNG carriers call, such as the US Gulf coast, Qatar, Australia, Russia and Malaysia. By Stefka Wechsler USGC bunkers and bunker alternatives $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more
News

US court asked for third Citgo auction extension


19/09/24
News
19/09/24

US court asked for third Citgo auction extension

Houston, 19 September (Argus) — The court-appointed special master overseeing the auction of US refiner Citgo has asked the court to delay the announcement of a successful bidder to 26 September and a sale hearing to December. Special master Robert Pincus planned to make an announcement of the proposed buyer on or about 16 September followed by a November sale hearing, but last minute legal challenges derailed what have otherwise been "robust negotiations with a bidder," according to a court filing today. "The special master is continuing to negotiate sale documentation with a bidder," today's motion said. Pincus previously requested a second extension in August and a first extension in late July . By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Small private Libyan firm exports oil through blockade


19/09/24
News
19/09/24

Small private Libyan firm exports oil through blockade

London, 19 September (Argus) — A small Libyan private firm appears to have been granted an exemption from an oil blockade, which has more than halved the country's exports. Arkenu Oil, which describes itself as a private oil and gas development and production firm, is scheduled to export 1mn bl of Sarir and Mesla crude from Marsa el-Hariga to Italy's Trieste on the Maran Poseidon, according to an official document seen by Argus . The tanker has been chartered by Turkish trader BGN and is currently loading its cargo. This is the first Arkenu shipment set to be exported since the country's eastern-based administration ordered a blockade on oil fields and terminals on 26 August in response to an attempt by its rival administration in the west to replace the central bank governor. It is also Arkenu's third known shipment since July. Arkenu exported a 1mn bl cargo on the Zeus on 10 July and another 1mn barrel cargo on the Yasa Polaris on 16 August, according to official documents and ship-tracking data. These were also Sarir and Mesla grade. Arkenu's exports are significant given that crude sales have historically been the preserve of NOC and a handful of international oil firms that hold stakes in the country's upstream such as Eni, TotalEnergies and OMV. Arkenu, which is based in the eastern city of Benghazi, is supposedly able to export its own crude based on an agreement with NOC which allocates it an unspecified share of production from its subsidiary Agoco's Sarir and Mesla fields in return for carrying out work to boost output at the sites. But there remain questions related to the legality of the deal, the nature of the work Arkenu is supposed to be carrying out and the company's technical capabilities. The three known Arkenu cargoes are worth around $240mn at prevailing market rates, Argus estimates. There has been no increase to Agoco's production capacity since the Arkenu deal was struck, one Libyan oil industry source said. Sarir and Mesla accounted for most of Agoco's roughly 280,000 b/d output in 2023. Arkenu and NOC have yet to reply to a request for comment. "The Haftar family is deliberately and selectively allowing crude exports that generate dollars outside the Libyan state, and they are doing so within the context of a blockade they imposed," said Jalel Harchaoui, a Libya specialist at the UK's Royal United Services Institute. "While the Libyan state struggles to figure out how to import food and medicine next month owing to the central bank crisis, the Haftars' strange oil blockade permits crude exports that profit a private Libyan entity," Harchaoui added. The leadership crisis at the central bank has degraded Libya's ability to carry out international financial transactions. "The only beneficiary from these Mesla and Sarir sales is an unknown private Libyan company with an account in Switzerland and the UAE, with zero dollars being deposited in the state," the oil industry source added. General Khalifa Haftar's Libyan National Army (LNA) controls the country's east and southwest and is the real force behind the blockade. Haftar is understood to be allowing some exports to continue as long as these revenues do not reach the central bank in Tripoli, which is controlled by the rival administration in the west. Libya's crude exports have averaged 410,000 b/d so far this month, according to Kpler. While this is well below pre-blockade levels of around 1mn b/d, it is well above levels seen in some past blockades. Rising exports in recent days suggests Libya's total crude production has picked up from an earlier Argus estimate of around 300,000 b/d to possibly around 500,000 b/d. Libya was producing 1mn b/d before the blockade. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Citgo auction result delayed amid last-minute motions


18/09/24
News
18/09/24

Citgo auction result delayed amid last-minute motions

Houston, 18 September (Argus) — The US court-appointed special master overseeing the auction of US refiner Citgo plans to object to a last-minute motion from the Venezuelan government to delay the sale process by four months. The Republic of Venezuela and state-owned oil company PdV filed a motion on Tuesday seeking a four-month pause in the sale of its refining subsidiary Citgo, which is being auctioned off to satisfy debts owed by PdV. Special master Robert Pincus said in a court filing today that he intends to object to Venezuela's motion for a pause. The last-minute motion from Venezuela comes days after the US District Court for the District of Delaware was expected to announce results of the winning bidder. The court asked for a second extension to the auction process in August, delaying announcing a successful bidder to on or about 16 September with a sale hearing on 7 November. But Pincus is now dealing with last-minute legal challenges filed last week outside of the Delaware courts by so-called "alter ego" claimants seeking to "circumvent" the Delaware court's sales process and "jump the line" for enforcing claims against PdV, the special master said in a filing last week. Bidders for Citgo's 804,000 b/d of refining capacity, terminals, retail fuel stations and other plants expect the assets to be sold free and clear of future claims by PdV creditors. Unresolved legal liabilities could lower the value bidders are willing to pay for Citgo, decreasing the pool of money available to those owed by PdV. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US seeks to purchase 6mn bl for SPR


18/09/24
News
18/09/24

US seeks to purchase 6mn bl for SPR

Washington, 18 September (Argus) — President Joe Biden's administration is trying to purchase 6mn bl of sour crude for delivery to the US Strategic Petroleum Reserve (SPR) as part of a plan to issue solicitations when prices are "favorable for taxpayers." The US Department of Energy (DOE) today released a solicitation to purchase up to 6mn bl of sour crude for delivery in February-May to the SPR's Bayou Choctaw site in Louisiana. If the purchase is successful, it would be the largest single purchase since the Biden administration launched its crude purchase program in early 2023. The solicitation offers a chance for the administration to buy crude for the SPR at a lower price than earlier purchases. Nymex WTI crude futures for delivery in February settled at $68.41/bl on Tuesday. The lowest-priced crude purchase under Biden was a 1.7mn purchase at a price of $72/bl in June 2023, and the average purchase price is about $76/bl. Bids for the solicitation are due by noon ET on 25 September. DOE has already purchased more than 50mn bl of sour crude for the SPR, of which 30mn bl have already been delivered. On 9 September, DOE said it purchased 3.42mn bl of sour crude for the SPR's Bryan Mound storage site at a price of $72.46/bl from the trading firm Macquarie Commodities Trading. The crude will be delivered in January-March, adding to an earlier purchase of nearly 2.5mn bl that will be delivered to the Bryan Mound site over the same time frame. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more