Colombia draws US support against Maduro: Update

  • : Crude oil, Oil products
  • 19/09/11

Updates throughout.

Bogota's case for casting Venezuelan president Nicolas Maduro and his government as sponsors of terrorist groups drew strong support today from the US and other allies in the western hemisphere, as well as from the Venezuelan opposition.

The US, Colombia, Brazil, Argentina, Canada and seven other members of the Organization of American States (OAS) voted today to invoke the 1947 Inter-American Treaty of Reciprocal Assistance. Venezuelan National Assembly speaker Juan Guaido, whom the OAS, the US and its allies in the western hemisphere recognize as the country's interim leader, voted in favor of the resolution. Mexico, which continues to recognize Maduro's government, opposed the invocation of the Rio Pact.

Colombia hopes to use the consultation process under the treaty, known as the Rio Pact or TIAR in Spanish, to build regional support for possible military action to thwart any substantial cross-border attacks from Venezuela. Colombia's foreign minister Carlos Holmes Trujillo spoke today at a special session of the OAS to present what Bogota says is evidence that the Maduro government encouraged Colombia's former guerrilla movement Farc to issue a call to arms against the Colombian government. Colombia says the Maduro government also provides active support to another Colombian rebel group, the National Liberation Army (ELN).

The US says it shares Colombia's concerns and sees the resolution as another means of undermining Maduro's grip on power. Deployment of the Venezuelan military along the Colombian border and "the presence of illegal armed groups and terrorist organizations in Venezuelan territory" demonstrate that Maduro is a threat to peace and security of Venezuela's neighbors, US secretary of state Mike Pompeo said today.

The Maduro government said today it will present "irrefutable information" to prove "the terrorist acts that are originated in Colombia against Venezuela."

The US will support Colombia if it takes military action to push back against attacks across the border with Venezuela, the State Department's Venezuela envoy Elliott Abrams said yesterday. "This is very dangerous, because if there are cross-border attacks from Venezuela into Colombia, we can expect the Colombians to react. And obviously, we would be fully supportive of Colombia in that situation," Abrams said.

Recognizing Guaido's interim authority has created a legal quandary for Washington as it considers Colombia's request to designate Venezuela as a state sponsor of terrorism.

"There is a small technical question here," Abrams said. The US no longer recognizes Maduro as Venezuela's legitimate leader, so "it raises a legal question about how you handle questions about sponsorship of terrorism." Bogota hoped a formal designation by Washington would lay a firm political foundation for potential military strikes by Colombia as Caracas deploys troops to the shared border.

In addition to the domestic repercussions of a potential military escalation, Bogota will have to contend with the uncertainty over the degree of US support as Washington evaluates the further course of its policy.

US president Donald Trump said today the US will continue to help the Venezuelan people "in a humanitarian way" and added that "it is probably not good in terms of crushing a terrible regime." Trump criticized his former national security adviser John Bolton, whom he fired yesterday, for being "way out of line" on Venezuela. "I disagreed with John Bolton on his attitude toward Venezuela," Trump said, without elaborating.

Bolton advocated intensifying the sanctions regime by targeting the remaining foreign buyers of Venezuelan crude. But Abrams said yesterday no such action is underway.

"Sanctions do work best when they are multilateral and when they are in a context of multilateral political support," Abrams said during a visit to Brussels to coordinate US and EU policy on Venezuela. "In this context the kind of sanctions the US is doing will have a real impact, are having a real impact."

Abrams blamed Russian state-controlled Rosneft, which is taking Venezuelan crude in repayment of prior loans made to Caracas, for "really squeezing" Venezuela. "They are buying these increased amounts of crude oil from Venezuela at a big discount and then they are selling them — refined products like gasoline, kerosene — at a big markup." But the US is not yet ready to impose sanctions to stop that trade, Abrams said. "At some point, we will have to consider the question of Rosneft's conduct and what kind of reaction we want to have to it."

Rosneft hit back against Abrams' comments, saying that US action to stop the return payment of its oil-backed loans would amount to illegal expropriation. But the company said it is ready to have an "open dialogue with the US to clarify its position."

US sanctions on Caracas have cut off state-owned PdV from what until January had been its primary sales market and redirected Venezuelan crude flows to India and China. Venezuela's oil production has stabilized at about 750,000 b/d in recent months, from a pre-sanctions level of about 1.15mn b/d, according to Argus estimates.


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24/04/30

Canada’s TMX pipeline ready to move crude: Update

Canada’s TMX pipeline ready to move crude: Update

Adds regulatory approvals received. Calgary, 30 April (Argus) — Canada's 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline can now start moving volumes to the Pacific coast after receiving final regulatory approvals today, more than a decade after the project was first conceived. The Canada Energy Regulator (CER) approved Trans Mountain's final applications on Tuesday, giving the midstream company a green light to put its C$34bn ($25bn) project into service. Trans Mountain had recently maintained its commitment to being ready by 1 May. The expansion nearly triples the existing 300,000 b/d Trans Mountain line that runs from Edmonton, Alberta, to Burnaby, British Columbia. Also expanded was the Westridge Marine Terminal from one dock to three, all capable of loading Aframax-sized vessels. The line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. Much of the new volume to flow on TMX is expected to be heavy sour crude. Federally-owned Trans Mountain had submitted applications as recent as 15 April for the final section of the pipeline about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The final applications concerned piping, valves and other components at two pipeline inspection device traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. The pipeline had been marred by legal challenges and cost over-runs since it was first proposed in 2013 by its then-owner US midstream firm Kinder Morgan. The Canadian government took ownership of it in 2018. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

New US rule may let some shippers swap railroads


24/04/30
24/04/30

New US rule may let some shippers swap railroads

Washington, 30 April (Argus) — US rail regulators today issued a final rule designed to help customers switch railroads in cases of poor rail service, but it is already drawing mixed reviews. Reciprocal switching, which allows freight shippers or receivers captive to a single railroad to access to an alternate carrier, has been allowed under US Surface Transportation Board (STB) rules. But shippers had not used existing STB rules to petition for reciprocal switching in 35 years, prompting regulators to revise rules to encourage shippers to pursue switching while helping resolve service problems. "The rule adopted today has broken new ground in the effort to provide competitive options in an extraordinarily consolidated rail industry," said outgoing STB chairman Martin Oberman. The five-person board unanimously approved a rule that would allow the board to order a reciprocal switching agreement if a facility's rail service falls below specified levels. Orders would be for 3-5 years. "Given the repeated episodes of severe service deterioration in recent years, and the continuing impediments to robust and consistent rail service despite the recent improvements accomplished by Class I carriers, the board has chosen to focus on making reciprocal switching available to shippers who have suffered service problems over an extended period of time," Oberman said today. STB commissioner Robert Primus voted to approve the rule, but also said it did not go far enough. The rule adopted today is "unlikely to accomplish what the board set out to do" since it does not cover freight moving under contract, he said. "I am voting for the final rule because something is better than nothing," Primus said. But he said the rule also does nothing to address competition in the rail industry. The Association of American Railroads (AAR) is reviewing the 154-page final rule, but carriers have been historically opposed to reciprocal switching proposals. "Railroads have been clear about the risks of expanded switching and the resulting slippery slope toward unjustified market intervention," AAR said. But the trade group was pleased that STB rejected "previous proposals that amounted to open access," which is a broad term for proposals that call for railroads to allow other carriers to operate over their tracks. The American Short Line and Regional Railroad Association declined to comment but has indicated it does not expect the rule to have an appreciable impact on shortline traffic, service or operations. Today's rule has drawn mixed reactions from some shipper groups. The National Industrial Transportation League (NITL), which filed its own reciprocal switching proposal in 2011, said it was encouraged by the collection of service metrics required under the rule. But "it is disheartened by its narrow scope as it does not appear to apply to the vast majority of freight rail traffic that moves under contracts or is subject to commodity exemptions," said NITL executive director Nancy O'Liddy, noting it was a departure from the group's original petition which sought switching as a way to facilitate railroad economic competitiveness. The Chlorine Institute said, in its initial analysis, that it does not "see significant benefit for our shipper members since it excludes contract traffic which covers the vast majority of chlorine and other relevant chemical shipments." By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

First TMX cargo booked on Aframax to China


24/04/30
24/04/30

First TMX cargo booked on Aframax to China

Houston, 30 April (Argus) — The first cargo shipped on the Trans Mountain Expansion (TMX) crude pipeline is scheduled to load on an Aframax in Vancouver, British Columbia, beginning 18 May for June delivery in China, according to sources with knowledge of the transaction. Suncor provisionally booked the Aframax Dubai Angel for a Vancouver-China voyage at $3.5mn lumpsum, equivalent to $6.39/bl for Access Western Blend, market participants said. In March, China's state-run Sinochem purchased the first TMX cargo — 550,000 bl of Canadian Access Western Blend — for June delivery. The shipping fixture would mark the first Vancouver-China crude delivery since May 2023, according to Vortexa, a possible indicator of steady Asia-Pacific demand to come with increased maritime access for Canadian oil producers. China already receives heavy sour Canadian crude re-exported from the US Gulf coast, with about 110,000 b/d arriving in 2023, Vortexa data show. The new 590,000 b/d pipeline begins commercial service on 1 May, with three Aframax-capable berths at Vancouver's Westridge Marine Terminal, up from one previously. An oversupply of Aframax crude tankers on the west coast of the Americas in anticipation of TMX-driven demand pressured Vancouver-loading rates to six-month lows on 19 April , according to Argus data, but market participants expect demand to increase beginning in the second half of May. Three regulatory approvals remained under assessment by the Canada Energy Regulator (CER) on 30 April. The applications concern piping, valves and other components at two pipeline inspection device traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Canada’s TMX awaits regulator OK on eve of service


24/04/30
24/04/30

Canada’s TMX awaits regulator OK on eve of service

Calgary, 30 April (Argus) — Regulatory approvals needed for the 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline in western Canada are coming down to the wire on the eve of entering commercial service. The major crude pipeline last week maintained its plan to start commercial operations on 1 May, but three filings remain under assessment by the Canada Energy Regulator (CER) with less than 24 hours to go. Federally-owned Trans Mountain requires all sections, called spreads, of the pipeline to receive regulatory blessing before the line can be put into service. Outstanding are applications pertaining to Spread 5B Part 3, which runs from kilometer post 1064 to 1067, according to CER's website. The segment is near Hope, British Columbia, about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The three applications concern piping, valves and other components at two pipeline inspection gauge (pig) traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. TMX will nearly triple the existing 300,000 b/d Trans Mountain system that connects oil-rich Alberta to the docks in Burnaby, British Columbia. Importantly, the line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. Spreads 6, 7A and 7B stretching from kilometer post 1075 to 1180 were approved earlier in the week, bringing the total number of approvals up to 39. The expansion was first conceived more than a decade ago with the intention of being operational by late-2017, but that date slipped amid cost overruns and repeated delays. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US crude output rebounds by 4.6pc in February: EIA


24/04/30
24/04/30

US crude output rebounds by 4.6pc in February: EIA

Calgary, 30 April (Argus) — US crude output rebounded by 4.6pc in February after freezing temperatures in the prior month took production offline in the three largest producing states. Output averaged 13.15mn b/d in February, up by 578,000 b/d from January, the Energy Information Administration (EIA) said today in its Petroleum Supply Monthly report. February's production was up by 622,000 b/d from February 2023 but remained short of the 13.3mn b/d record high set in November 2023. North Dakota was hit particularly hard by winter storms in January, which temporarily knocked as much as 700,000 b/d of production offline. The country's third-largest producing state pumped out 1.29mn b/d during February, up by 173,000 b/d from January and 159,000 b/d higher than in February 2023. About 86pc of North Dakota's production was 40.1°API or higher, according to the EIA. Texas, home to more than 40pc of the country's crude production, pumped out 5.55mn b/d in February. This was up by 172,000 b/d from January and 242,000 b/d higher than February 2023. New Mexico, which shares the prolific Permian basin with Texas, also boosted its output in February with 1.98mn b/d of production. This was up by 120,000 b/d from January and up by 183,000 b/d from February 2023. Similar to North Dakota, about 91pc of crude produced in New Mexico was 40.1°API or higher, while in Texas about 55pc of output fell into that category. About 44pc of all crude produced in Texas fell into the relatively heavier 30.1-40°API range. US output in the Gulf of Mexico came in at 1.8mn b/d in February, up from the 1.78mn b/d produced in the prior month but down by 28,000 b/d from February 2023. Almost all the crude produced in the Gulf of Mexico was 40°API or lower. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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