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Venezuelan oil union arrests unsettle industry critics

  • : Crude oil, Oil products
  • 20/11/25

The recent arrests of two prominent Venezuelan oil union officials are having a chilling effect on local industry sources who have long filled an information void at state-owned PdV.

National oil federation (FUTPV) director Eudis Girot and retired refinery operator Guillermo Zarraga have been charged by the attorney general's office with treason, terrorism and organized criminal association.

Girot has also been charged with leaking internal information to international news media, and Zarraga has been charged with causing a 27 October explosion that destroyed a 120,000 b/d crude distillation unit at PdV's 635,000 b/d Amuay refinery.

Girot has denied the charges. Zarraga's family says the charges are false. Both are jailed in Caracas at facilities run by Venezuela's intelligence agencies DGCIM and Sebin.

Another senior oil union official who was forced into hiding tells Argus the arrests seek to muzzle PdV and oil ministry officials who regularly leak information after the government suspended the publication of all official data four years ago.

The oil ministry sends monthly crude production numbers to Opec, but PdV and the ministry have not issued any official operational and financial data since the end of 2016, just as the industry's decline was accelerating. The official Opec data itself is routinely at odds with estimates from secondary sources, including Argus.

Venezuelan mid-level officials who leak internal data such as refinery runs and field-level production are often motivated by a desire to counter the rosier official narrative with more realistic, technical interpretations of the industry's chronic woes.

The arrests were ordered by oil minister Tareck El Aissami after Girot and other critics disclosed that the Nabarima floating storage vessel holding 1.3mn bl of crude was at risk of sinking in the Gulf of Paria, a senior PdV official told Argus. PdV is currently draining the vessel in a heavily guarded, piecemeal operation that is widely considered an environmental risk, rebuffing US-cleared offers by its Italian minority partner Eni to carry out a more efficient ship-to-ship transfer.

Frequent detailed leaks of PdV's repeated failed attempts to restart gasoline production since March at the 305,000 b/d Cardon refinery and 140,000 b/d El Palito refinery also angered Aissami and PdV chief executive officer Asdrubal Chavez, the PdV official said.

"Aissami and Chavez are going to make examples of Girot, Zarraga and others to send a message to critics and unauthorized information suppliers at the oil ministry and PdV."

Betrayal

Some senior Venezuelan oil union officials openly backed the country's US-supported opposition leader Juan Guaido after he declared an interim administration in place of President Nicolas Maduro in January 2019. Since then, many of Guaido's associates have been detained or have fled abroad, including most recently Leopoldo Lopez, who is now in Spain. Maduro remains firmly entrenched in power despite crippling US sanctions.

Several of the oil union officials and PdV workers now say they feel betrayed by Guaido and the four main opposition political parties that support him.

"Some opposition leaders are trying to make money any way they can to take their families out of Venezuela permanently, and the ones who cannot leave for whatever reason are looking for ways to mend their differences with (President Nicolas) Maduro," one of the union officials said. "Venezuelans who believed in Guaido have become enormously disenchanted and feel betrayed by the opposition. It is now clear to everyone that the opposition leadership is pursuing its own interests and isn't capable of fixing Venezuela's problems."


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24/09/18

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

Calgary, 18 September (Argus) — Canada's newest crude pipeline to the country's west coast amounts to a fossil fuel subsidy of at least C$8.7bn ($6.4bn), a research and policy think-tank said. The federal government is unlikely to recover its C$34bn investment to construct the 590,000 b/d Trans Mountain Expansion (TMX) connecting oil producers in Alberta to the Pacific coast, qualifying the project as a major subsidy for the fossil fuel industry, according to the International Institute for Sustainable Development (IISD) on Wednesday. This runs contrary to the government's policy to eliminate direct support for the oil and gas sector , a goal Justin Trudeau's Liberals said was achieved in 2023. The government was the first G20 country to hit this milestone, following a 2009 commitment by the group to reach the goal by 2025. The subsidy as it relates to TMX could be as high as C$18.7bn, the Canadian non-profit said, but noted the entire amount could still be recovered by increasing tolls and/or implementing a levy. This levy could be against either all producers, or all shippers, of crude in the Western Canadian Sedimentary Basin (WCSB), whether they use TMX or not, the IISD suggested. About 90pc of Canada's crude production comes from western Canada, with much of that derived from Alberta's oil sands region. "A levy in the range of C$1-2/bl . . . over a 10-year period would be sufficient to recover the entire cost of the subsidy and the loss to the Canadian taxpayer," according to the IISD. Alternatively, fixed tolls on TMX would need to be more than doubled to C$24.53/bl from C$11.37/bl to recover all capital costs for the line that went into service on 1 May this year, according to IISD's figures. Variable tolls would be added to this. The terms in the original contracts signed between shippers and then-owner Kinder Morgan were no longer appropriate as they did not reflect the rising risks of the project, said the IISD. Kinder Morgan suspended the project in 2018, which led to the Canadian government buying both the expansion project and the original 300,000 b/d Trans Mountain line from US midstream company that same year. The federal government has maintained its plan to sell the pipeline once operational, but the final tolls are yet to be determined. Whether the operator or shippers will bear the brunt of the massive cost overruns is also still unknown. Tolls, representing cash flows for any prospective buyer, will help dictate the price that the expanded Trans Mountain system will fetch. The IISD suggests a sale price is likely to be between C$17.6bn-26.6bn, resulting in a net loss to the government of between C$8.9bn-18bn assuming its cost of investment climbs to nearly C$36bn before a sale is reached. But despite warnings by opponents it would go underused, TMX has been as advertised, opening a new frontier for oil sands operators and disrupting trade flows throughout the Pacific Rim. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Indian windfall tax on domestic crude output at zero


24/09/18
24/09/18

Indian windfall tax on domestic crude output at zero

Mumbai, 18 September (Argus) — India has reduced the windfall tax on domestic crude production to zero from a previous 1,850 rupees/t ($3/bl), in line with a fall in global oil prices. The new rate is effective from 18 September. The rate was last revised on 31 August when it was cut by 12pc . The rate is revised every two weeks. Global crude prices fell nearly 9pc during 1-18 September. The windfall tax was cut to zero during 4-19 April and 16 May-15 July 2023. The Indian government first imposed the windfall tax in July 2022 because of a sharp increase in crude prices that led to domestic crude producers making windfall gains. Indian producers sell crude to domestic refineries at international parity prices. India's crude production in August fell by 4pc from a year earlier to 520,000 b/d, oil ministry data show. Crude imports in August fell by 8pc from July and by nearly 1pc against a year earlier to 4.22m b/d in August, Vortexa data show. India has again extended a deadline to 21 September for submitting bids for the ninth bidding round under the Hydrocarbon Exploration and Licensing Policy's Open Acreage Licensing Programme, as it attempts to boost investment to lift domestic upstream output. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

USCG updates ongoing lower Mississippi restrictions


24/09/17
24/09/17

USCG updates ongoing lower Mississippi restrictions

Houston, 17 September (Argus) — The US Coast Guard (USCG) will further limit northbound movement for barges transiting the lower Mississippi River despite slightly higher water levels following Hurricane Francine's landfall late last week. The USCG announced on 16 September that all northbound traffic traveling from Tunica, Mississippi, to Tiptonville, Tennessee, can only have five barges wide and only four of those can be loaded. Barges also cannot be loaded deeper than 9.5ft. Any southbound traffic from Vicksburg, Mississippi, to Tunica cannot move more than seven barges wide or be drafted deeper than 10.5ft. Southbound traffic from Tiptonville to Tunica can only be six barges wide or less and cannot have a draft greater than 10ft. The USCG has updated lower Mississippi river draft restrictions about four times since the end of August, but this is the third year in a row of notable low water for the fall on the lower Mississippi river which has triggered draft restrictions to arrive more quickly than previous years. Hurricane Francine brought significant rainfall to the lower Mississippi at the end of last week . But this has not eased the minds of mariners, who anticipate the water may leave as quickly as it arrived. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California regulator floats future LCFS linkage


24/09/17
24/09/17

California regulator floats future LCFS linkage

Monterey, 17 September (Argus) — California would welcome bringing US low-carbon fuel standard (LCFS) programs together in a common market, one of the state's top regulators said on Tuesday. Such a linkage is unlikely to occur in the near future, but California Air Resources Board (CARB) deputy executive director Rajinder Sahota said it is something worth pursuing. "I totally think we should link our LCFS programs," she said at the Argus North American Biofuels, LCFS and Carbon Markets Summit in Monterey, California. Sahota said California and other LCFS states are working on a system that could allow the trading of compliance credits between companies covered by each program, but did not provide any other details. Her comments mark a change in tenor from CARB, which historically has said a linkage would be difficult given the differing starting points and carbon intensity targets of each program. Oregon's Clean Fuels Program (CFP) started five years after California's LCFS, while Washington launched its Clean Fuel Standard just last year. New Mexico is working on its own program that will begin by 2026. Oregon and Washington regulators at the conference said there have not been any formal discussions about a linkage, but did not completely dismiss the idea, highlighting the close informal coordination between the states. "All puzzles can be solved eventually," said Bill Peters, interim director of the CFP. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California still eyeing 2025 start to LCFS changes


24/09/17
24/09/17

California still eyeing 2025 start to LCFS changes

Monterey, 17 September (Argus) — California regulators plan to propose changes to the state's Low Carbon Fuel Standard (LCFS) in coming days in hopes of ensuring updates to the program take effect in early 2025. The California Air Resources Board (CARB) will soon issue a new rulemaking package for a 15-day public comment period, Rajinder Sahota, the agency's deputy executive officer, said today at the Argus North American Biofuels, LCFS & Carbon Markets Summit in Monterey, California. "We will be working very hard to ensure we have the targets in place" by 1Q, she said. On a practical level, CARB will have to adopt any amendments to the LCFS by early January or will be forced to start over. California law requires the agency to wrap up a rulemaking within 12 months of the first proposal. Sahota declined to say what changes, if any, to the most recent language would be part of the next 15-day package. The previous language included a 9pc "step down" in the carbon intensity requirement in 2025 and also contemplated a 20pc/yr cap on a company's credit generation from soybean- and canola-oil-based biodiesel or renewable diesel to begin in 2028. That new language "is coming very shortly," she said. The agency's board is scheduled to hold a hearing on the proposed changes on 8 November and could adopt the new language at that session. The LCFS requires yearly reductions in the carbon intensity of on-road transportation fuels. Fuels with scores above the targets produce deficits, which must be offset with credits generated from distribution to the market of approved, lower-carbon alternatives. California currently requires a 20pc drop in carbon intensity by 2030. The ongoing rulemaking could bump that carbon intensity reduction up to 30pc. Surging use of renewable diesel and outsized credit generation from renewable natural gas have overwhelmed deficit generation to create a glut of credits available for future compliance. LCFS credits do not expire, and 26.1mn metric tonnes of credits — 16pc more than all the new deficits generated in 2023 — were available for future compliance by the end of March. Credits fell in May to trade at $40/t, the lowest level for current quarter credits since June 2015, but have since rebounded as the CARB process has played out. But credit prices are still well below their historical highs. Argus on Monday assessed spot LCFS credits at $58/t. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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