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PdV exchanges Dominican refinery stake for debt

  • Spanish Market: Crude oil, Oil products
  • 20/08/21

Venezuela's state-owned PdV has transferred its 49pc stake in the 34,000 b/d Refidomsa refinery to the Dominican Republic in a debt-for-equity transaction that could set a precedent for Venezuelan asset sales and debt restructuring.

The Dominican government paid $88.13mn for the refinery stake in exchange for the retirement of defaulted PdV corporate and Venezuelan sovereign bonds held by Dominican private-sector conglomerate Grupo Rizek, people close to the deal tell Argus.

In back-to-back transactions, Grupo Rizek's financial vehicle PATSA purchased the refinery stake from PdV and immediately on-sold it to the Dominican government.

The bonds were retired at far below their nominal value but above the secondary market value of pennies on the dollar, Argus was told.

The purchase of the PdV asset was done at an "advantageous" price for the Dominican Republic, finance minister Jose Manuel Vicente said yesterday. "This will allow the government to control the company's expansion plans and strengthen it as a player in the hydrocarbons market," he said.

According to the finance ministry, PdV had acquired its stake in the refinery, near Santo Domingo, in 2010 for $131mn.

Refidomsa is among several Caribbean refineries that PdV once promised to expand but later abandoned as it struggled to sustain crude production and meet its overseas obligations, particularly after the US imposed financial sanctions on Venezuela in 2017 and oil sanctions two years later. Venezuela's government blames the sanctions for causing it to default on its debt obligations.

Saddled with billions of dollars in debt, Caracas is hoping the modest Dominican deal will establish a framework for other debt-for-equity transactions encompassing local and international assets as it engages diplomatically to break an impasse with the US-backed opposition and lift sanctions.

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For Santo Domingo, the transaction will restore Refidomsa's access to local and international credit to finance an upgrade of the refinery. And for Grupo Rizek, the deal takes defaulted obligations off its books.

The US had no objection to the completion of the PdV asset purchase, Vicente said. "Before completing the purchase, the government consulted with the US to ensure that the transaction did not present any type of problem because of sanctions," he said.

Elsewhere in the Caribbean, Jamaica confiscated PdV's 49pc stake in the island's 35,000 b/d Petrojam refinery in 2019, claiming the company had reneged on a plan to upgrade and expand the facility.

In Cuba, state-owned Cupet quietly took over PdV's 49pc interest in the 65,000 b/d Cienfuegos refinery in 2017.

PdV also lost assets in Curacao and Aruba which had been key parts of its Dutch Caribbean logistical network.


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01/11/24

TMX exports reach new record in October

TMX exports reach new record in October

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Lyondell Houston refinery closure to begin in January


01/11/24
01/11/24

Lyondell Houston refinery closure to begin in January

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TMX adds to ‘pulse’ of 4Q freight market: Teekay


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31/10/24

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CNRL 3Q oil and gas output dips


31/10/24
31/10/24

CNRL 3Q oil and gas output dips

Calgary, 31 October (Argus) — Canadian Natural Resources' (CNRL) crude, natural gas and natural gas liquids (NGL) output decreased by 2.2pc in the third quarter. The Calgary-based integrated oil and gas company produced 1.36mn b/d of oil equivalent (boe/d) during the third quarter, down slightly from 1.39mn boe/d in the same quarter last year, the company said Thursday. CNRL's upgraders produced 498,000 b/d of synthetic crude, up from 491,000 b/d in the same quarter last year as the Athabasca Oil Sands Project's (AOSP) Scotford upgrader produced stronger than expected volumes and completed a planned turnaround nine days ahead of schedule. The impact of planned turnarounds to CNRL's annual synthetic crude output was reduced to 5,400 b/d, down from the company's initial forecast of 11,000 b/d. The company also acquired Chevron's Canadian oil sands and Duvernay shale production for $6.5bn in the quarter, increasing CNRL's annual synthetic crude production by 62,500 b/d and its stake in AOSP to 90pc. Bitumen production at CNRL's thermal in-situ projects was 272,000 b/d, up from 269,000 b/d in the same quarter of 2023 as output at Jackfish reached 128,000 b/d, a new quarterly record. The company's crude and NGL output, excluding thermal in-situ, was 228,000 b/d, down from 232,000 b/d in the same quarter last year. CNRL will also increase its committed capacity on the 590,000 b/d Trans Mountain Expansion (TMX) by 75,000 b/d to 169,000 b/d, allowing the company to secure almost one third of the line's committed capacity after PetroChina Canada offloaded its capacity on 10 October. The newly expanded pipeline has provided Canadian producers with more meaningful access to global buyers, reducing Canadian heavy crude price volatility and adding significant egress capacity out of Alberta. Yet, it is uncertain how long unconstrained egress in Alberta can be sustained with oil sands production expected to grow. "It certainly helps secure those barrels which would otherwise be potentially in an egress constrained situation," said CNRL president Scott Stauth on Thursday, adding stronger pricing is now possible by aiming volumes at California or Asia. CNRL posted a profit of C$2.27bn ($1.63bn) in the quarter, down from a C$2.34bn profit during the third quarter of 2023. By Kyle Tsang Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US biofuel feedstock use dips in August


31/10/24
31/10/24

US biofuel feedstock use dips in August

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