US in 'no rush' to lift sanctions on Venezuela

  • Spanish Market: Crude oil
  • 08/03/21

President Joe Biden's administration has no immediate plans to relax the sanctions pressure against Venezuela's oil sector, despite doubts about its effectiveness and humanitarian drawbacks.

"There is no rush to lift sanctions," a senior administration official told reporters today. "The US is going to continue to increase the pressure, and it is going to expand that pressure multilaterally" until such time that Venezuelan president Nicolas Maduro's government negotiates in good faith with its opponents and agrees to hold free and fair elections, the US official said.

Biden's administration today made good on his campaign pledge of granting temporary asylum status to more than 300,000 Venezuelans living in the US — a small part of the more than 5mn refugees who left the country over the past decade because of deteriorating economic and social conditions.

Biden has criticized his predecessor's policy of unilateral sanctions against Caracas as ineffective, and his top officials say that the criticism is still valid. But changing that policy has proved difficult because it could require Washington to abandon its recognition of Venezuelan opposition leader Juan Guaido as the country's interim leader — a bridge too far for a US administration that has promised to make the promotion of human rights and democracy a top priority.

The net result is that US officials make a good case for altering the sanctions regime but not until a credible dialogue between Maduro and the Guaido-led opposition succeeds in ensuring new elections in Venezuela.

In Washington, senior Democratic members of the House of Representatives have called on the White House to ensure that sanctions do not interfere with the provision of humanitarian assistance to Venezuela. The oil industry separately is pushing for restoring crude-for-diesel swaps for non-US companies, making the case that it would ensure fuel supply for food and aid distribution and power generation.

"The focus of sanctions should be to increase pressure on the (Maduro) regime, eliminate any sort of access to corrupt capital to sustain themselves but also not one that penalizes unnecessarily the Venezuelan people," the US official said.

"The only outcome of this crisis is a negotiation that leads to a democratic solution," the official said.

Maduro in the past has used negotiations with the opposition as a delaying tactic, so the US will need to be persuaded that future talks are in earnest, according to the official. "Once that happens, we will consult with the international community and the (Guaido) interim government and make decisions about whether sanctions would be lifted."

Venezuela's crude production has recovered to around 500,000 b/d, but that is still less than half pre-US sanctions levels. While the financial and oil sanctions imposed by Washington have accelerated the decline in the Opec producer's output, decades of mismanagement and the departure of trained professionals from state-owned PdV are the root causes of the drop.

The US is looking for new ways to pressure the Maduro government, since Caracas appears to have adapted to the oil sanctions, the US official said. "We have clearly seen is that the regime has adapted to sanctions, oil markets long ago have adapted to oil sanctions, and that they are able to sustain themselves through illicit flows."

The US has vowed to coordinate its Venezuela policy more closely with the EU and countries in the western hemisphere. But the US is almost alone now in continuing to recognize Guaido and the defunct legislature he heads as the country's sole legitimate authority. The EU has called on the opposition to make "difficult compromises" in joining negotiations with Maduro.


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21/06/24

Nigeria adds more oil blocks to 2024 licensing round

Nigeria adds more oil blocks to 2024 licensing round

Lagos, 21 June (Argus) — Nigeria's upstream regulator NUPRC has added 17 oil blocks to its 2024 licensing round and removed five, leaving the total on offer at 24, double the original number. The 17 additions are all deepwater blocks and have been added as a result of new data acquired. "We had indicated that the total number of blocks we are putting on offer is 12. Actually, our intention was to do more but we were constrained by availability of data," NUPRC chief executive Gbenga Komolafe said. Newly acquired data became available between 7 May and 11 June, leading to the round's offer being expanded, Komolafe said. Five blocks on the original list of 12 — PPL 3008, 3009, 267, 268 and PML 51 — have been withdrawn because of "ongoing litigation", according to NUPRC. The regulator did not elaborate on the litigation. It previously said that PPL 3008 and 3009 were formerly OPL 321 and 323, respectively, with the name change reflecting compliance with the provisions of petroleum industry legislation that came into effect in 2021. The blocks are located in the western Niger delta, close to the 44,000 b/d Abo field floating production, storage and offloading (FPSO) facility operated by Italy's Eni. Nigerian upstream operator Oando, which is in the process of acquiring one of Eni's three Nigerian subsidiaries for an undisclosed amount, has a 30pc working interest in OPLs 321 and 323 through its subsidiary Equator Energy. According to Oando, South Korea's KNOC is operator of a joint exploration work programme for the two blocks, which were awarded in Nigeria's 2005 licensing round before becoming the subject of litigation involving the Nigerian government, the operator and Oando's subsidiary. Meanwhile, PML 51, PPL 267 and PPL 268 are new blocks carved out from the former OML 122, NUPRC said. The shallow water OML 122 block, east of the Shell-operated Bonga field, has long been the subject of litigation and is listed on the website of local upstream firm Peak Petroleum as its sole asset. An industry source told Argus that the withdrawn oil blocks were included in the 2024 licensing round after the regulator enforced forfeiture rules against the companies previously linked to them. But legal challenges are not surprising, the source added. At the launch of its 2024–26 regulatory action plan in January, NUPRC said enforcement of "drill or drop provisions" in the 2021 legislation is one of its main commitments. Nigeria plans to conclude the 2024 licensing round with ministerial consent and contracting in January 2025. NUPRC has pushed back the deadline for submissions of pre-qualification documents from 25 June this year to 5 July and the start of data access and evaluation from 4 July to 8 July. By Adebiyi Olusolape Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canadian greenwashing bill passes


20/06/24
20/06/24

Canadian greenwashing bill passes

Calgary, 20 June (Argus) — A proponent of a major carbon capture and storage (CCS) project in Canada removed most information from its website this week after a federal bill targeting "greenwashing" successfully made its way through Parliament. The Pathways Alliance, a group of six oil sands producers, removed material from its website in response to Bill C-59 after it passed its third and final reading in Canada's senate on 19 June, citing "uncertainty on how the new law will be interpreted and applied." Parts of the soon-to-be law will "create significant uncertainty for Canadian companies," according to a statement by Pathways which is the proponent of a massive C$16.5bn ($12bn) CCS project in Alberta's oil sands region. The Pathways companies proposed using the project and a host of other technologies to cut CO2 emissions by 10mn-22mn t/yr by 2030. Project details and projections are now gone from the Pathways website, social media and other public communications as the pending law will require companies to show proof when making representations about protecting, restoring or mitigating environmental, social and ecological causes or effects of climate change. Any claim "that is not based on adequate and proper substantiation in accordance with internationally recognized methodology" could result in penalties under the pending law. Offenders may face a maximum penalty of C$10mn for the first offense while subsequent offenses would be as much as C$15mn, or "triple the value of the benefit derived from the anti-competitive practice." Invite to 'resource-draining complaints' The bill does not single out oil and gas companies, but the industry includes the country's largest emitters and has long been in the cross-hairs of the liberal government. Alberta's premier Danielle Smith says the pending bill will have the unintended effect by stifling "many billions in investments in emissions technologies — the very technologies the world needs." Construction of the Pathways project is expected to begin as early as the fourth quarter 2025 with operations starting in 2029 or 2030. The main CO2 transportation pipeline will be 24-36-inches in diameter and stretch about 400km (249 miles). It will initially tap into 13 oil sands facilities from north of Fort McMurray to the Cold Lake region, where the CO2 will be stored underground. Pathways includes Canadian Natural Resources, Cenovus, Suncor, Imperial Oil, ConocoPhillips Canada and MEG Energy, which account for about 95pc of the province's roughly 3.3mn b/d of oil sands production. Some producers took down content as did industry lobby group the Canadian Association of Petroleum Producers (CAPP), which highlighted the "significant" risk the legislation creates. "Buried deep into an omnibus bill and added at a late stage of committee review, these amendments have been put forward without consultation, clarity on guidelines, or the standards that must be met to achieve compliance," said CAPP president Lisa Baiton on Thursday. This "opens the floodgates for frivolous, resource-draining complaints." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Shipping industry urges action to stop Red Sea attacks


20/06/24
20/06/24

Shipping industry urges action to stop Red Sea attacks

Dubai, 20 June (Argus) — The International Chamber of Shipping (ICS) has called for urgent action to stop "unlawful attacks" on commercial shipping in the Red Sea by Yemen's Houthi rebels after the sinking of a second bulk carrier since November last year. "This is an unacceptable situation, and these attacks must stop now," the ICS said. "We call for states with influence in the region to safeguard our innocent seafarers and for the swift de-escalation of the situation in the Red Sea." The Iran-backed Houthis began attacking ships in the Red Sea six weeks after the Israel-Hamas war broke out last year in what they claim is an act of solidarity with Palestinians in Gaza. The British-owned, Belize-flagged Handysize bulk carrier Rubymar sank on 4 March this year, four weeks after a Houthi attack. And the United Kingdom Maritime Trade Operations (UKMTO) said on 19 June that it believes the Greek-owned and operated bulk carrier Tutor has also sunk after the Houthis struck it with an unmanned surface vessel on 12 June. Since the attacks began, three sailors have been killed and two ships seized in separate incidents, one of which has since been freed. "We have heard the condemnation and appreciate the words of support, but we urgently seek action to stop the unlawful attacks on these vital workers and this vital industry," the ICS said. "And we must not forget the crew members from the [cargo vessel] Galaxy Leader and [containership] MSC Aries who are still being held captive." The Houthis have stepped up their attacks in recent days, prompting counter measures by US and UK military forces deployed in the area. The Red Sea is one of the world's most important shipping lanes, serving as a vital trade link between Europe and Asia. The attacks have led to an increase in freight rates and shipping insurance costs. And they have disrupted trade flows through the Suez Canal at the northern end of the Red Sea as many shipowners opt to avoid the area by taking the longer route around the southern tip of Africa. The combined flow of crude and oil products transiting the Suez Canal in both directions dropped by 34pc on the month and by 65pc on the year in May, according to preliminary data from trade analytics firm Kpler. Most oil passing through the canal southbound is now of Russian origin — 92pc in May, according to Kpler data. India, China and the Middle East were the main destinations. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alberto year's first named Gulf of Mexico storm


19/06/24
19/06/24

Alberto year's first named Gulf of Mexico storm

Houston, 19 June (Argus) — A storm system in Mexico's Bay of Campeche became the first named tropical storm of this year's Atlantic hurricane season, bringing heavy rains and winds to the south Texas and northeast Mexico coasts. Tropical Storm Alberto is expected to come ashore in Mexico's Tamaulipas and Veracruz states late Wednesday or early Thursday, with maximum sustained winds of 40mph, according to the US National Hurricane Center. Heavy rain may be seen as far north as Corpus Christi, Texas, but the heaviest rains are expected inland in Mexico. Rain and heavy seas associated with the Gulf of Mexico storm system were expected to disrupt ship-to-ship lightering operations off the coast of Corpus Christi, Galveston and Beaumont-Port Arthur, Texas. The storm system does not appear to have curtailed US offshore Gulf of Mexico oil and gas production. This year's Atlantic hurricane season is expected to be more active than normal , according to the US National Oceanic and Atmospheric Administration, with 4-7 major hurricanes possible. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Iran's crude output at 3.6mn b/d, says oil minister


19/06/24
19/06/24

Iran's crude output at 3.6mn b/d, says oil minister

Dubai, 19 June (Argus) — Iran's crude output has risen to around 3.6mn b/d, according to the country's oil minister Javad Owji. This puts production at the highest level since sanctions were reimposed on Tehran's oil sector in 2018 following Washington's exit from the Iran nuclear deal. "Our oil production, which was 2.1mn b/d at the beginning of our time in office [in September 2021], has reached 3.6mn b/d," Owji said today during a presentation to the Iranian parliament. "During these three years… with round-the-clock work and effort, production of crude oil in the country rose by more than 1.4mn b/d," he said. "A major part of that increase came through signing investment contracts with [domestic] contractors." When the administration of Iran's late president Ebrahim Raisi assumed office, Iran's crude exports were at their lowest level in a decade, Owji added. Owji's current production figure is 200,000 b/d above where he put Iranian crude output in November last year . At that time, he predicted a rise to 3.6mn b/d by March 2024, continuing an upward trend since the back end of 2022. In July last year, Owji put output at just shy of 3.1mn b/d. His latest assessment is around 300,000 b/d above Argus' estimate for both April and May . The last time Argus estimated Iranian crude output as high as 3.6mn b/d was back in July 2018. The rebound in production has been driven by Iran's ability to boost its exports. Iranian exports began picking up in the months after US president Joe Biden assumed office in January 2021, reaching around 700,000-750,000 b/d compared with 500,000 b/d before the US election. It was not until the second half of 2022 that exports took another leap, to 1mn b/d and beyond. Iran's crude exports have averaged just shy of 1.6mn b/d since the start of this year, according to data from Vortexa, up from 1.42mn b/d in 2023 and 990,000 b/d in 2022. The reasons for the revival in exports have been the subject of much debate, with some attributing it to more relaxed enforcement of sanctions by the US and others saying it has more to do with Iran scaling up its methods of circumvention. The debate even became a point of contention among Iranian presidential candidates this week as they gear up for the country's election on 28 June. Conservative candidates and even regime hardliners largely attribute the boost in exports to methods of circumvention. "Constructive and extensive relations with the world are required for [improving] the economy. This happened during the tenure of martyr Raisi. Now the US foreign secretary must explain to the [US] Senate why Iran can sell 2mn b/d of oil now," former nuclear negotiator Saeed Jalili said on 15 June. Raisi administration officials have repeatedly pointed to their techniques to get around sanctions and "energy diplomacy" as reasons for Iran's success in raising exports. But the reformist camp refutes those claims, with former foreign minister Javad Zarif rejecting the conservative narrative on state television on 18 June. "They [hardliners] said 'we taught them how to sell oil.' Not at all," Zarif said. "When Biden took office, his policy was to loosen the screw. Wait until Trump returns to office, and then we can see what [the hardliners] say." By Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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