Oil seizure aggravates Venezuela-Carib tensions
Bogota, 11 January (Argus) — The seizure of a crude cargo in Curacao's Bullen Bay terminal has further aggravated tensions between Venezuela and Dutch-controlled Caribbean islands that have long provided refining and logistical support to Venezuela's beleaguered state oil industry.
The Panama-flagged Proteo was detained by as-yet unknown private parties after it loaded a cargo and tried to leave the terminal, according to an official at Bullen Bay. The Proteo is an Aframax tanker with a capacity of about 600,000-700,000 bl.
The seizure, for which details remain sketchy, is related to Venezuelan state-owned PdV's myriad of overdue debts. A Curacao government official told Argus the incident is a private commercial matter.
"This has to do with PdV's commercial arrangements, and reflects the company's financial problems," the official said. "We are not involved in these matters, but we are concerned that this — and other and similar developments — could affect the operations of the Isla refinery that is important to our economy."
The tanker incident coincides with a broader souring of relations between Caracas and the islands of Curacao, Aruba and Bonaire which are controlled by the Netherlands.
On 5 January the Venezuelan government announced a 72-hour closure of air and sea links with the islands, and later said the closure would be indefinite until the islands' authorities tamp down on smuggling of Venezuelan goods, including minerals.
A lasting break in commercial ties would damage the economies of the islands that rely on revenue from PdV's current and planned involvement in oil refining, bunkering and storage.
A Dutch interior ministry spokesman told Argus this morning that a meeting will be held in Aruba tomorrow with officials from the islands and Venezuela to try to diffuse tensions. Currently visiting the region is Raymond Knops, the Dutch minister in charge of relations with the islands.
PdV manages the 350,000 b/d Isla refinery in Curacao under a lease agreement with the local government that will expire in 2019. PdV uses Isla to process crude into gasoline, naphtha, diesel, jet fuel, asphalt, base oils and lubricants, and to blend its diluted extra-heavy crude with light crude for export.
PdV's US downstream subsidiary Citgo has leased the mothballed 280,000 b/d San Nicolas refinery in Aruba, saying it plans a $700mn upgrade to process Orinoco extra-heavy crude from Venezuela into intermediate grades that will be shipped to Citgo's US-based refineries in Louisiana and Texas for further processing.
On Bonaire, PdV owns the 10mn bl Bopec oil terminal. But the company could be forced to close the facility by next month if it fails to make repairs to bring it into compliance with international safety and environmental standards, the Dutch government said in December.
Aruba lies 29km off Venezuela's coast. Bonaire is 80km away, and Curacao 64km.