PdV weighing force majeure on US crude sales

Venezuelan state-owned PdV is threatening to declare force majeure on crude exports to US buyers to ensure the company is not held legally liable for missed deliveries because of new US sanctions.

"We're evaluating our options, including declaring force majeure on contractual shipments" to the US market, oil minister and PdV chief executive Manuel Quevedo said last night.

PdV exported about 500,000 b/d of crude to the US in 2018 and imported over 120,000 b/d of products, mainly gasoline for the local market and naphtha used as diluent for Orinoco extra-heavy crude.

The main buyers of Venezuelan crude in the US are Valero, PdV subsidiary Citgo, Chevron and PBF Energy.

PdV "has every intention of maintaining its operations with the companies that have supply contracts with us, but we also want to protect materials suppliers that have contracts with us," Quevedo added.

Sanctions have already disrupted normal shipping traffic between the US and Venezuela, including the halt yesterday of five clean medium range (MR) tankers under charter by Citgo and at least one shipowner fixing Aframax tankers along the route choosing to stop loading cargoes. Other shipowners continue to move cargoes between the two countries, and traders continued to book clean tankers along the route.

The new US sanctions imposed against PdV are "an outright theft" perpetrated against Venezuela by the US government, Quevedo added.

The US sanctions announced on 28 January are intended to compel president Nicolas Maduro to step down and transfer power to interim president Juan Guaido, the elected National Assembly president who invoked the 1999 Bolivarian constitution on 23 January to declare himself acting president of Venezuela until new elections are held.

The US, Canada and most of Latin America recognize Guaidó as the legitimate president of Venezuela. Yesterday the assembly approved ambassadors named by Guaidó to serve in the countries that recognize him. Guaidó has called for massive street demonstrations starting at noon today.

Maduro since yesterday is offering to hold talks with the opposition, a move that is likely to be rebuffed by Guaidó. The rubber stamp supreme court late yesterday approved a travel ban and asset freeze on Guaidó, who brushed off the measures as groundless.