PdV exchanges Dominican refinery stake for debt

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

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.

Back to the market

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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24/06/21

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


24/06/20
24/06/20

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


24/06/20
24/06/20

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


24/06/19
24/06/19

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.

Nigeria tightens sulphur cap on oil product imports


24/06/19
24/06/19

Nigeria tightens sulphur cap on oil product imports

London, 19 June (Argus) — Nigeria has reduced the sulphur cap on refined oil product imports to 50ppm, according to market participants. The new cap — which took effect at the start of June, according to sources — marks a sharp reduction from a previous 200ppm limit set on 1 March . Sources suggest there was no widespread information campaign to make market participants aware of the specification change. The lower sulphur limit comes as Nigeria braces for the imminent ramp-up of 10ppm ultra-low sulphur diesel production at the country's 650,000 b/d Dangote refinery, followed by 10ppm gasoline production in mid-July. A lower sulphur content ceiling for imports will likely favour the sale of diesel, jet fuel and gasoline from the Dangote refinery to the local Nigerian market, which until March was able to import high-sulphur products upwards of 2,000ppm. Some 10ppm diesel has already been delivered to Nigeria since the start of June, as traders have struggled to source any available 50ppm diesel to import into the country under the new cap, one trader said. Despite the regulatory change, one local Nigerian marketer told Argus that a 30,000t cargo of 150ppm gasoline is discharging in the country on 19 June, raising questions around enforcement of the new cap. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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