Venezuela scrambling to load oil ahead of China tax

Spanish Market: Crude oil, Oil products
20/05/21

Venezuela's state-owned PdV is scrambling to load crude cargoes before China imposes a new import tax that has blindsided management in Caracas, Argus has learned.

Most of the Opec country's exports wind up in China's Shandong province, where independent refiners are girding for a new $30/bl tax on diluted bitumen, the product category under which Venezuela's 16°API Merey blend is imported after quietly transhipping through Malaysia and other intermediate destinations to mitigate the risk of US sanctions.

Top PdV officials were caught off guard by the new tax, which would effectively squeeze out heavy sour barrels from the strategic Shandong market. The sanctions sharply limit Venezuela's market alternatives. And if trading firms reclassify the Venezuelan supply as crude to avoid product taxes, imports would rapidly deplete refiners' crude import quotas.

A shrinking Chinese market also implies that Venezuela's oil-backed debt to Beijing would take much longer to pay off, accumulating more interest in the meantime.

The tax takes effect on 12 June, and PdV is hoping loadings before 11 June will be clear of the new levy. In the meantime, it is hoping Beijing will reconsider the measure.

Haste makes waste

PdV's efforts to rush out cargoes from its main Jose terminal are hamstrung by loading equipment breakdowns and oil quality issues such as high metals content and sediment.

In the first half of May, PdV loaded about 5.7mn bl or 380,000 b/d of its Merey blend crude bound for Asia, short of its plans.

Among the VLCCs that loaded in the period are Shandong-bound Ceres 1 on behalf of Montmagastre Ventures with the shipping agent identified as Desarrollo 1405, and the Joy and Princess Moore heading to Singapore on behalf of Yunshu Maritime, according to PdV terminal reports seen by Argus.

The company is working to repair loading arms, pumps and hoses but the equipment is mostly patched up because of a shortage of spare parts and skilled workers to conduct full-blown maintenance, company officials say.

A fresh backlog of tankers is starting to build at Jose, a recurring trend that reverberates upstream in the Orinoco heavy oil belt, the main source of Venezuelan production.

While the VLCC Comuna is currently loading, the Maya started loading Merey on 13 May but paused the next day because of quality issues. Zarby finally loaded after a bout of equipment problems at the terminal.

The tankers themselves are an opaque mix that tanker-tracking services list as out of range, decommissioned or unknown altogether. Transponders are routinely switched off to avoid detection.

The US imposed oil sanctions on Venezuela in early 2019 in a bid to dislodge President Nicolas Maduro. Mainstream shipowners and insurers steer clear of Venezuelan oil trade to avoid the risk of sanctions themselves.

Negotiating edge

The new Chinese tax is taking effect just as the Maduro government and the US-supported political opposition flirt with another round of negotiations. Narrower oil export options threaten to erode some of Maduro's advantage heading into talks.

Aside from the Asia-bound VLCCs, PdV has loaded several tankers at Jose this month for storage or cabotage to its eastern terminals, and for Cuba, which relies on Venezuelan crude and heavy products mainly for power generation.

Other crude grades on the export roster include Special Hamaca Blend, a synthetic grade from PdV's PetroPiar upgrader at Jose. The plant went off line earlier this week because of a gas flow line blast. Chevron has a 30pc stake in PetroPiar, but its activities are restricted by a sanctions waiver that the US is likely to renew in coming days.

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14/05/25

Shale unable to absorb price decline: Continental

New York, 14 May (Argus) — Shale output growth plans are being sidelined for the time being as this year's decline in oil prices curtails investment into the sector, according to the chief executive officer of Continental Resources. "There's nothing that we can use in the industry to absorb a $10/bl drop in price from a technology standpoint," chief executive officer Doug Lawler said at the Super DUG Conference & Expo 2025 in Fort Worth, Texas, today. "There are not capital efficiencies that can be captured that makes up $10/bl." The pullback in capital that is starting to be seen across the industry as a result of the price rout caused by uncertainty around President Donald Trump's tariffs and surging Opec+ supply will continue as the year progresses, Lawler said. Top shale company executives have warned in recent weeks that shale is in for a rough ride given the price drop, which has since stabilized following a US-China trade truce agreed last weekend. US onshore crude production has likely peaked , according to leading independent Diamondback Energy, while Occidental Petroleum chief executive Vicki Hollub warned the peak could come sooner than expected . "I would maybe caveat it just a little bit different, and not call it a peak, necessarily, but I think we're in for a period of a plateau," Lawler said today. Earlier this year, Continental announced a joint venture with Turkey's national oil company and US-based TransAtlantic Petroleum to develop oil and gas resources in southeast and northwest Turkey. "We don't see it necessarily as an international strategy," Lawler said. "We really see it more as a continuation of the history and heritage of the company, of being exploration-focused." It also should not be viewed as the company seeing a lack of domestic opportunities, given 5-10pc of its overall annual capital budget will be directed at exploration over the next few years. Continental, which was founded by shale billionaire and leading Trump donor Harold Hamm in 1967, is the largest leaseholder and producer in the Bakken basin. It also has positions in the Scoop and Stack plays of the Anadarko basin of Oklahoma, and is also active in the Powder River Basin of Wyoming and Permian basin of Texas. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Bolivian president bypasses reelection

14/05/25

Bolivian president bypasses reelection

Montevideo, 14 May (Argus) — Bolivian president Luis Arce will not run for a second five-year term and instead backed a united front to elect another leftist candidate. Arce's decision on Tuesday came on the eve of the filing deadline for the 17 August election. He called on former president Evo Morales to also step aside from the race to improve the chances of another left-wing contender. Morales is fighting a court ruling that he is ineligible to run after already having multiple terms. Arce said the Movement to Socialism (MAS) party should rally behind senate president Andronico Rodriguez, 36. Rodriguez announced his candidacy on 3 May as a third way, but remains closely aligned with Morales. He has led the senate since 2020. Four center-right candidates are expected to compete in the race. The MAS has governed Bolivia for most of the past 20 years. Arce and Morales, allies turned enemies, blame each other for Bolivia's economic turmoil, including its dwindling oil and natural gas production. Inflation through April was 5.5pc, up from 1.3pc in the same period last year. Inflation was 9.9pc last year, the highest since 2008. The World Bank forecasts GDP growth at 1.4pc for the year. The oil and gas sector is at the heart of the crisis. Bolivia has gone from fuel independence to importing 54pc of gasoline and 86pc of diesel, both of which are heavily subsidized. The government forecast $2.9bn on fuel subsidies this year. Crude production was close to 21,000 b/d in 2024, according to the statistics agency. It was approximately 51,000 b/d in 2014. Natural gas output, the cornerstone of Bolivia's economic growth for most of this century, has fallen. Output was approximately 33mn m³/d in 2024, down from a peak of 56mn m³/d in 2006. Proven reserves were at 4.5 trillion cf in 2023, less than half of the 10.7 trillion reported in 2017, according to the state-owned YPFB. YPFB in early May announced a new tender to certify reserves by the end of this year. Bolivia stopped daily piped gas exports to Argentina in September and has a contract to export up to 20mn m³/d to Brazil. Domestic demand for gas is close to 14mn m³/d, stated YPFB. On 1 April Argentina began using Bolivia's pipeline infrastructure to ship natural gas to Brazil. Three companies — Argentina's Pluspetrol and Tecpetrol, and France's TotalEnergies — have so far sent gas to Brazil. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

German road firms issued €10.5mn tender-rigging fines

14/05/25

German road firms issued €10.5mn tender-rigging fines

London, 14 May (Argus) — German competition authorities have found seven companies guilty of co-ordinating tenders and contracts with order values usually of between €40,000 and €200,000. The German Federal Cartel Office (Bundeskartellamt) imposed fines totalling €10.5mn ($11.8mn) on seven road repair companies for customer and tender collusion, it announced on 13 May. The companies involved are AS Asphaltstrassensanierung, bausion Strassenbau-Produkte, Bitunovia, Gerhard Herbers, alles fur den Bau, Mainka Strassenunterhaltung, and Muritzer Oberflechentechnik (Mot). The companies AS, bausion, Herbers and Bitunova were found to have divided various clients from the federal states of Saxony, Thuringia and Saxony-Anhalt among themselves across 2018 and 2019. In 2016-19, the companies bausion, Liesen, Mainka and Mot were discovered to have regularly co-ordinated on tenders from public contracting authorities in Brandenburg and, in 2016 and 2017, Saxony-Anhalt, and the companies Liesen and Mot also co-ordinated tenders in Mecklenburg-Western Pomerania. The violations affected a large number of tenders and contracts from public contracting authorities such as municipalities and state road construction authorities. The orders included road repair measures including surface treatment, patching of road surfaces, crack repair or the supply of bitumen emulsion or chippings. In addition to breaking antitrust law, the bid agreements are also punishable under Section 298 of the Criminal Code. The findings came to a head when the German Federal Cartel Office carried out a search operation in August 2019 together with the Dusseldorf Public Prosecutor's Office and the North Rhine-Westphalia State Criminal Police Office. When setting the fine, it was taken into account that Bitunovia had co-operated with the federal office within the framework of the leniency programme. All proceedings were concluded by way of amicable settlement and the fine notices are final. By Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec downgrades non-Opec+ supply growth forecasts

14/05/25

Opec downgrades non-Opec+ supply growth forecasts

London, 14 May (Argus) — Opec has downgraded its 2025 and 2026 non-Opec+ liquids supply growth forecasts for a second month in a row, mainly driven by lower output expectations from the US. In its Monthly Oil Market Report (MOMR), published today, Opec revised down by 100,000 b/d its non-Opec supply growth forecasts for 2025 and 2026 to 810,000 b/d and 800,000 b/d, respectively. This follows identical downgrades of 100,000 b/d for each year in Opec's previous report . While Opec did not give a reason for its supply revisions, the recent decline in oil prices is likely to have played a role. Production growth in the US, particularly in the shale patch, is highly sensitive to price movements, for example. US shale producer Diamondback Energy chief executive Travis Stice earlier this month said US onshore crude production had likely peaked as drilling activity slowed in response to lower oil prices. Opec sees US supply growing by 330,000 b/d in 2025 and 280,000 b/d in 2026, compared with 450,000 b/d and 460,000 b/d in its March MOMR. Lower non-Opec+ supply expectations may have played a role in the decision by some Opec+ members to accelerate their planned supply increases for May and June. Opec kept its global oil demand growth forecasts unchanged for this year and next at 1.3mn b/d and 1.28mn b/d, respectively. These forecasts remain bullish compared to those of the IEA and US' EIA. Opec+ crude production — including Mexico — fell by 106,000 b/d to 40.92mn b/d in April, according to an average of secondary sources that includes Argus . Opec puts the call on Opec+ crude at 42.6mn b/d in 2025 and 42.9mn b/d in 2026. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sierra Leone plans upstream licensing round in 2025

14/05/25

Sierra Leone plans upstream licensing round in 2025

Lagos, 14 May (Argus) — Sierra Leone will launch an upstream licensing round by October, as part of efforts to start producing crude within two to three years. The west African country is "on the cusp of producing", according to upstream regulator PDSL's director general Foday Mansaray, with the government putting measures in place to make offshore investments attractive. "Once all the de-risking of the basin happens, we'll be in a position to launch a licensing round," Mansaray said at the Invest in African Energy Forum in Paris. Sierra Leone's most recent licensing round, held in 2023, resulted in six blocks awarded to FA Oil, which is part of a Nigerian conglomerate that owns a non-operated stake in Nigeria's Agbami oil block. PDSL has approached BP and Chevron, separately, in the past five months to gauge their interest in negotiating for oil blocks directly, offering a 10pc royalty rate, 25pc company income tax rate, a petroleum tax that applies only when realised crude prices are above $60/bl and several other fiscal terms. But Sierra Leonean acreage is lightly explored, with only eight wells drilled since exploratory work started in the 1980s. A spate of exploration activity between 2003–13 resulted in the Venus, Mercury, Jupiter and Savannah discoveries, but none proceeded to commercial development. "We are hoping this time next year that we can announce Sierra Leone will be drilling its first well since 2012," Mansaray said. PDSL previously told Argus it has 140,000km² of offshore open acreage available with 50,000km² of that categorised as "best prospective" and 15,000km² as "highly prospective". The country is likely to offer 55,000km² in this year's licensing round. By Adebiyi Olusolape and George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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