Venezuela awaits new products cargo from Italy
Venezuela will receive another products cargo from Italy next week, highlighting the endurance of debt-related oil trade with EU companies that falls outside the scope of escalating US sanctions on Caracas.
The Malta-flagged Gemma is scheduled to berth at Venezuela's Amuay terminal around 8 July, having loaded at Milazzo, Italy, on 19-21 June, according to ship tracking services. Italy's Eni and Kuwait's state-owned KPC run a 235,000 b/d refinery at Milazzo, which received a 1mn cargo of Venezuelan crude this week on the Greece-flagged Delta Tolmi.
Eni and Spain's Repsol import Venezuelan crude and deliver products back under debt-and-swap arrangements tied to their upstream operations in Venezuela, which has been the target of US sanctions since January 2019. The sanctions do not have a direct secondary component, but the US has been aggressively targeting individual tankers and shipping companies in recent weeks in an effort to drive down revenue to the government of President Nicolas Maduro. The US, the EU and other countries recognise opposition leader Juan Guaido as Venezuela's legitimate president.
The US sanctions are mainly focused on gasoline, Venezuela's core transport fuel and one of the products that state-owned PdV is no longer able to produce in steady quantities or quality at its dilapidated refineries. Recent gasoline and alkylate shipments from Iran, and limited production at PdV's CRP refining complex, have provided a short-term reprieve from an acute fuel shortage. It is unclear what product the Gemma is transporting to Venezuela.
Repsol and Eni are partners in the Cardon 4 joint venture, which encompasses the Perla offshore natural gas field. The sole offtaker is PdV.
Cardon 4 started production at Perla in 2015. Peak output had been forecast to reach 1.2bn ft³/d (12.4bn m³/yr) in 2020, but production has slumped from an initial 550mn ft³/d because of a lack of adequate infrastructure, investment and demand.
Repsol and Eni have joint ventures with PdV in the Orinoco extra-heavy oil belt, the source of most of Venezuela's production. The Opec country's output collapsed to around 300,000 b/d in late June and early July, from 550,000 b/d in May, according to Argus estimates. The downturn mainly reflects a lack of storage and PdV's difficulties in marketing and transporting its crude.
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TMX is a fossil fuel subsidy of at least C$8.7bn: IISD
TMX is a fossil fuel subsidy of at least C$8.7bn: IISD
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USCG updates ongoing lower Mississippi restrictions
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