PdV opens Moscow office, deepens Russia ties
Venezuela's national oil company PdV has opened its new Moscow office, highlighting the deepening ties between Caracas and its Russian patron.
The PdV Russia office, located on Arbat Street in downtown Moscow, will engage in "business and management consulting," according to registration documents seen by Argus at the oil ministry in Caracas.
PdV filed documentation on 6 August with Russia's Unified State Register of Legal Entities (USRLE) to register its new subsidiary PdV Russia as a limited liability company (LLC) in which PdV-EuroAsia holds a 98pc stake and Havana-registered PdV Cuba holds 2pc.
PdV in March shut down its longtime European office in Lisbon after the US government toughened sanctions to include the Opec country's oil industry, effectively cutting off the US market for Venezuela crude. The sanctions are aimed at forcing out President Nicolas Maduro in favor of Juan Guaido, the head of the opposition-controlled National Assembly whom more than 50 countries recognize as Venezuela's interim president.
In the more than seven months since the US levied the oil sanctions, Russia's state-controlled Rosneft has emerged as the main lifter of Venezuela crude. The supply partly services oil-backed loans, and mostly flows into Rosneft's Nayara refinery system in India. Rosneft's liftings have increased further in recent weeks, as China's state-owned CNPC pauses loadings.
The new office in Moscow is "commercially logical because Rosneft is now PdV's main oil client, loading two-thirds of Venezuela's oil exports in August," a senior oil ministry official said. Venezuela exported over 775,000 b/d of crude in August, the official said.
Russia supports the Maduro government and maintains that US sanctions violate international law.
Speaking in Brussels yesterday, the US State Department's Venezuela envoy Elliott Abrams said Rosneft was opportunistically "squeezing" Venezuela by reselling its oil, and hinted at the possibility of expanding US sanctions on Russia to include the oil company. "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," Abrams said.
Rosneft's main Venezuelan asset is the 140,000 b/d PetroMonagas integrated project that upgrades Orinoco extra-heavy crude into a lighter synthetic grade. But the upgrading plant at Jose has been shut down for months on operational problems.
Other assets include minority stakes in the 250,000 b/d PetroMiranda and 400,000 b/d PetroVictoria Orinoco joint ventures which are not in commercial production yet. Rosneft also has minority stakes in the Petroperija and Boqueron ventures operating small legacy oil fields in Zulia state and eastern Venezuela.
Venezuela's abundant natural gas rather than oil could prove to be a more attractive pursuit for Rosneft. In early 2016, the Russian company and PdV signed a Heads of Agreement to establish a 50:50 joint venture to produce, treat and market natural gas at the Patao, Mejillones and potentially Rio Caribe offshore fields.
Russian arms help
Russian weaponry features prominently in the Venezuelan armed forces' controversial military exercises on the border with Colombia that started yesterday. The equipment on display includes Russian-made Igla-S portable missile launchers and S-300 surface-to-air anti-aircraft missile systems. And Russian as well as Cuban military advisers and technicians are outfitted in Venezuelan fatigues in strategic border states, including Tachira, Venezuelan military sources tell Argus.
Venezuela's government has been lobbying Moscow for more credit and exploring the use of a Russian payment mechanism. But Russia's response to the petition for more financial support has been cool so far. And Rosneft said early this week it would welcome an "open dialogue" with the US over its liftings of Venezuelan oil.
Caracas is counting on Russia to maintain high-level support at the UN, which will hold its General Assembly in New York starting on 17 September. The UN continues to recognize Maduro's presidency, but the Washington-based Organization of American States (OAS) does not.
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South Germany product oversupply dampens price rise
South Germany product oversupply dampens price rise
Hamburg, 8 July (Argus) — Oil product oversupply in southern Germany lessened the effects of price rises last week, and sales surged. Concerns about storm damage in the Caribbean and declining US stocks led to a rise in prices for crude and gasoil, which were reflected in German prices for heating oil, diesel and gasoline. But Miro's 310,000 b/d Karlsruhe and Bayernoil's 215,000 b/d Neustadt-Vohburg refineries have been oversupplied since the start of the month because flooding prevented buyers from collecting. The rise in gasoil futures as prices in the south and southwest remained comparatively low, which prompted many market participants to stock up on middle distillates. Volumes for heating oil and diesel submitted to Argus reached their highest since mid-June on 2 July. Demand has been declining since then, and the oversupply is decreasing. Unfavourable weather conditions have delayed a continued, nationwide increase in diesel demand from agriculture, which is weighing on the need for additional imports into northern Germany. Domestic refineries are running at high capacity and an increasing supply of imported diesel in northwest Europe is keeping the cif Hamburg cargo premium at a consistently low level. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec+ crude production falls in June
Opec+ crude production falls in June
London, 8 July (Argus) — Opec+ crude output by members subject to cuts fell for a third straight month in June, as lower Russian production offset rises from some serial overproducers. Output fell by 90,000 b/d to 33.98mn b/d in June, according to Argus estimates, the lowest in three years. But it could have been lower, with the alliance overshooting its target for the month by 130,000 b/d (see table). Lower Opec+ production has played a key role in tightening oil markets in recent weeks. The $7-8/bl rise in oil prices over the past month will have come as a relief to Opec+, which initially saw prices slide after key members signalled their intention to start unwinding some of their production cuts from October . The nine Opec members subject to cuts were 150,000 b/d above target in June, but this was partially offset by the nine non-Opec members of the group, which produced 20,000 b/d below. Leading non-Opec producer Russia has driven much of the alliance's output falls in the past three months, as a pre-existing export cut pledge was replaced with an output reduction. And while it reduced production by 120,000 b/d to 9.14mn b/d last month, this was still well above its target of 8.98mn b/d. Much steeper falls could be on the horizon from Russia if it makes good on a promise to compensate for producing above target in recent months. Kazakhstan was another big overproducer last month, with its output rising by 80,000 b/d to 1.56mn b/d — 90,000 b/d above target. Despite outlining a plan to drive down output and compensate for overproducing this year, Kazakhstan has not met its target in any of the first six months of 2024. But lower production is on the horizon, with Kazakhstan undertaking maintenance at key fields later in the year — probably in August and October, according to its initial compensation plan. Iraq was again the alliance's largest overproducer last month, with output rising by 40,000 b/d to 4.2mn b/d — around 200,000 b/d above target. Like Kazakhstan, Iraq has failed to meet its target in any month this year, despite also outlining a plan to compensate for producing above quota. Rising summer temperatures boosted crude burn for power generation last month, but most of its overproduction is down to Baghdad's unwillingness to acknowledge surging production from the semi-autonomous Kurdish region. Iraq and Kazakhstan's combined overproduction has averaged 290,000 b/d this year, making their task of compensating much harder in the coming months. Disruption and decline In contrast, an emerging number of Opec+ members have been unable to hit their production targets in recent months. Grappling with natural decline and upstream challenges, Azerbaijan produced 80,000 b/d below its target of 550,000 b/d in the first six months. Malaysia also underproduced, by an average of 40,000 b/d in the same period. War-torn Sudan's production has fallen to just 20,000 b/d from pre-conflict levels of around 70,000 b/d. And South Sudan, which is entirely reliant on Sudan for its exports, has seen its production more than halve owing to the continued shutdown of a key pipeline in Sudan . Production was relatively uneventful in the Mideast Gulf Opec+ contingent. Saudi Arabia's output fell by 10,000 b/d to 8.95mn b/d, the UAE shed 10,000 b/d to 2.94mn b/d and Kuwait dropped by 20,000 b/d to 2.4mn b/d. Production from the three members exempt from production targets edged up in June. Sanctions-hit Iran continued its upward trajectory, adding 20,000 b/d to 3.31mn b/d — the highest since September 2018. Libya added 40,000 b/d to reach 1.22mn b/d on recent upstream work and Venezuela edged higher by 20,000 b/d despite the return of US sanctions in April. By Aydin Calik Opec+ crude production mn b/d Jun May* Jun target† ± target Opec 9 21.38 21.44 21.23 +0.15 Non-Opec 9 12.60 12.63 12.62 -0.02 Total 33.98 34.07 33.85 +0.13 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Jun May Jun target† ± target Saudi Arabia 8.95 8.96 8.98 -0.03 Iraq 4.20 4.16 4.00 +0.20 Kuwait 2.40 2.42 2.41 -0.01 UAE 2.94 2.95 2.91 +0.03 Algeria 0.91 0.90 0.91 0.00 Nigeria 1.44 1.48 1.50 -0.06 Congo (Brazzaville) 0.26 0.26 0.28 -0.02 Gabon 0.23 0.25 0.17 +0.06 Equatorial Guinea 0.05 0.06 0.07 -0.02 Opec 9 21.38 21.44 21.23 +0.15 Iran 3.31 3.29 na na Libya 1.22 1.18 na na Venezuela 0.86 0.84 na na Total Opec 12^ 26.77 26.75 na na †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Jun May* Jun target† ± target Russia 9.14 9.26 8.98 +0.16 Oman 0.76 0.76 0.76 +0.00 Azerbaijan 0.47 0.46 0.55 -0.08 Kazakhstan 1.56 1.48 1.47 +0.09 Malaysia 0.35 0.36 0.40 -0.05 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.05 0.05 0.08 -0.03 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.07 0.06 0.12 -0.05 Total non-Opec 12.60 12.63 12.62 -0.02 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Heavy rain, wind expected in Houston from Beryl: Update
Heavy rain, wind expected in Houston from Beryl: Update
Houston, 8 July (Argus) — Tropical storm Beryl is expected to regain hurricane strength before coming ashore near Matagorda, Texas, early Monday, bringing heavy rain and wind to the Houston area. As of 8pm ET Sunday, the center of the storm was about 120 miles east-southeast of Corpus Christi, Texas, with maximum sustained winds of 70mph, moving northwest at 12mph, according to the National Hurricane Center (NHC). The storm track forecast has shifted to the north of Corpus Christi, likely sparing that city's refining and oil export industries from the most severe conditions, although Citgo said its 165,000 b/d Corpus Christi refinery is running at reduced rates as part of its hurricane preparedness plan. Peak storm surge of 4-7ft is expected between Matagorda Bay and San Luis Pass, including at Freeport, home to a number of petrochemical plants and an LNG export terminal. Galveston Bay, which includes numerous refineries and oil export terminals along the Houston Ship Channel and Texas City, is expected to see 4-6ft of storm surge. The ports of Houston, Galveston, Freeport and Texas City were closed to all traffic at 5pm ET Sunday, according to the US Coast Guard. The Port of Corpus Christi has been closed since Saturday afternoon. US Gulf coast refiners appear to have robust fuel inventories for this time of year should the storm lead to operational issues. The four-week average of Gulf coast gasoline inventories in the week ended 28 June was up by over 4pc from the same period in 2023 and up by 6pc from 2022, after hitting a near six-month high in the penultimate week of June. Residents and businesses in the Houston area may see power outages Monday from the high winds, according to local emergency management officials. Rainfall is expected to range between 6-10 inches with 15 inches in some isolated areas, according to NHC. Little oil, gas production disruption Disruptions to US Gulf of Mexico oil and gas operations appear to be limited given Beryl's approach to the west of most US offshore oil and gas operations, although some platforms were evacuated late last week. Chevron said it has already started to send non-essential workers who were evacuated back to offshore facilities. Mexican offshore operations were halted late last week when the storm first entered the Gulf after passing over the Yucatan Peninsula. Early last week Beryl was a Category 5 storm, which made it the strongest on record for the month of July, as it left a trail of destruction in the Caribbean . The second named storm of the 2024 Atlantic hurricane season, Beryl followed tropical storm Alberto, which came ashore in northeastern Mexico late last month. 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 that pack sustained winds of 111mph or higher possible. By Tom Fowler, Nathan Risser and Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Beryl aims between Corpus Christi, Houston
Beryl aims between Corpus Christi, Houston
Houston, 7 July (Argus) — Tropical storm Beryl was expected to regain hurricane strength today before coming ashore between Corpus Christi and Houston, Texas, early Monday. As of 11am ET today the center of the storm was about 195 miles southeast of the refining and oil export hub of Corpus Christi with maximum sustained winds of 65mph. Moving northwest at 10mph, its landfall was expected at about 2am ET Monday, according to the National Hurricane Center (NHC). The track of the storm's landfall has moved toward the east for the past two days, moving Corpus Christi out of the area likely to see the highest winds and storm surge. The most powerful winds and storm surge should be centered on areas near Matagorda Bay, according to the forecast, with 4-6ft of storm surge expected. Galveston Bay, which include numerous refineries and petroleum export terminals along the Houston Ship Channel and Texas City, was expected to see 3-5ft of storm surge. The port of Corpus Christi was closed to all traffic as of Saturday afternoon while the ports of Houston, Galveston, Freeport and Texas City were set to "Yankee" status at 8am ET today, suspending all inbound traffic, bunkering and lightering operations. The Houston-area ports were expected to close to all traffic later today as the storm nears landfall, according to the US Coast Guard. Disruptions to US Gulf oil and gas operations so far appear to be limited given Beryl's approach to the west of most US offshore and gas operations. Mexican offshore operations were halted late last week when the storm first entered the Gulf after passing over the Yucatan peninsula. Early last week Beryl was a Category 5 storm, which made it the strongest on record for the month of July, as it left a trail of destruction in the Caribbean. The second named storm of the 2024 Atlantic hurricane season, Beryl followed tropical storm Alberto, which came ashore in northeastern Mexico late last month. 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 that pack sustained winds of 111mph or higher possible. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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