Washington 'embargoes' Venezuela assets: Update 2

Spanish Market: Crude oil, Oil products
06/08/19

Adds comment from Guaido, Bolton.

The US has issued a blanket prohibition on the sale or transfer of Venezuelan government property in the US, including assets that belong to state-owned PdV.

An executive order by President Donald Trump, issued yesterday, blocks the transfer of any property or shares of property in the US held by the Venezuelan president Nicolas Maduro's government or anyone determined by the Treasury and State departments to be supporters of the Venezuelan government. The decision prohibits the sale of any interest in US independent refiner Citgo, Venezuela's most valuable overseas asset, after the country's creditors won a key US court victory in the pursuit of unpaid debts.

"Given this measure, Citgo and all of its assets are protected," Venezuela's National Assembly leader Juan Guaido said in a tweet. "In addition, any debt that the regime intends to incur with assets of the nation will be illegal. Anyone who wants to benefit from the crisis will be driven away."

The US and more than 50 western governments recognize Guaido as Venezuela's interim president. Yesterday's designation exempts the interim Guaido government and the National Assembly, as well as humanitarian aid.

Former Canadian mining firm Crystallex is pursuing shares of Citgo to satisfy a $1.4bn arbitration award against Venezuela. The Venezuelan opposition lobbied the US to block any such transfer following last week's ruling by the US Third Circuit Court of Appeals upholding Crystallex's efforts. The decision could lead to an auction of the controlling company's shares, a move that has rattled lenders and affirmed a path for companies seeking payment for more than $150bn in arbitration awards and other debt.

Crystallex did not have an immediate comment. Licenses exempting certain business — including those for PdV-owned US independent refiner Citgo and Chevron's minority stake in a Venezuelan synthetic crude joint venture with PdV — remain in place. Most licenses allowing for winding down business with Venezuelan government entities have expired. The new requirements extend prohibitions against financial transactions beyond the Office of Foreign Assets Control's (Ofac) specially designated nationals and blocked persons list (SDN).

Guaido has installed directors of Citgo and PdV, an action upheld by the Delaware Chancery Court late last week. But the opposition leader has not expanded his control inside Venezuela, and an attempt to depose President Nicolas Maduro's government fizzled out earlier this year.

Trump and his administration officials previewed the executive order as an economic "embargo" against Venezuela. Under that interpretation, Venezuela joins Iran and Cuba on a short list of countries the US has placed under an economic embargo that would discourage other countries from doing business with those nations.

But Trump's order does not impose secondary sanctions and is limited to Venezuelan government assets in the US, according to Doug Jacobson, partner in law firm Jacobson Burton Kelley.

Trump's order was issued ahead of today's conference on Venezuela in Lima, Peru, where governments that recognize Guaido as leader will discuss plans for Venezuela's political transition and economic recovery. The US and other donors are due to unveil extensive plans for restoring Venezuela's battered oil sector and economy once Maduro steps down and Guaido takes over as president.

"Maduro is hoping to wait out the international community and the people of Venezuela," US national security adviser John Bolton said at that conference. "We show here today that the international community remains steadfast in its commitment to increase the pressure and accelerate a peaceful transition to Venezuela's only legitimate government institution, the National Assembly."

But the prospect of a government transition in Venezuela remains remote as Maduro maintains control over the country. And the US administration has had to contend with the possibility that the Venezuelan assets under Guaido's control may have been lost to debt-holders.

The US imposed sanctions on Venezuela in January to cut off revenue to the Maduro government and support new elections. US crude imports from Venezuela, once the third-largest supplier of heavy, sour crude, fell to zero in May.

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22/11/24

Cop: Drafts point to trade-off on finance, fossil fuels

Baku, 22 November (Argus) — The new draft on the climate finance goal from the UN Cop 29 climate summit presidency has developed nations contributing $250bn/yr by 2035, while language on fossil fuels has been dropped, indicating work towards a compromise on these two central issues. There is no mention of fossil fuels in either the new draft text on the global stocktake — which follows up the outcome of Cop 28 last year, including "transitioning away" from fossil fuels — or in the new draft for the climate finance goal. Developed countries wanted a reference to moving away from fossil fuels included, indicating that not having one would be a red line. The new draft text on the climate finance goal would mark a substantial compromise for developing countries, with non-profit WRI noting that this is "the bridging text". Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new draft sets out a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". It also notes that developed countries will "take the lead". It sets out that the finance could come from multilateral development banks (MDBs) too. "It has been a significant lift over the past decade to meet the prior, smaller goal... $250bn will require even more ambition and extraordinary reach," a US official said. "This goal will need to be supported by ambitious bilateral action, MDB contributions and efforts to better mobilise private finance, among other critical factors," the official added. India had indicated earlier this week that the country was seeking around $600bn/yr for a public finance layer from developed countries. Developing countries had been asking for $1.3 trillion/yr in climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. The draft text acknowledges the need to "enable the scaling up of financing… from all public and private sources" to that figure. On the contributor base — which developed countries have long pushed to expand — the text indicates that climate finance contributions from developing countries could supplement the finance goal. It is unclear how this language will land with developing nations. China yesterday reiterated that "the voluntary support" of the global south is not part of the goal. The global stocktake draft largely focuses on the initiatives set out by the Cop 29 presidency, on enhancing power grids and energy storage, though it does stress the "urgent need for accelerated implementation of domestic mitigation measures". It dropped a previous option, opposed by Saudi Arabia, that mentioned actions aimed at "transitioning away from fossil fuels". Mitigation, or cutting emissions, and climate finance have been the overriding issues at Cop 29. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. By Georgia Gratton and Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore light distillate stocks hit seven-week high

22/11/24

Singapore light distillate stocks hit seven-week high

Singapore, 22 November (Argus) — Singapore light distillate and middle distillate inventories rose to multi-week highs while residual fuel stocks fell to a three-week low for the week ending 20 November, according to Enterprise Singapore. Singapore's light distillates stocks rose to a seven-week high, boosted by increased naphtha imports and an onslaught of gasoline cargoes from Saudi Arabia into the city-state. Naphtha imports rose by 21pc on the week to 1.98mn bl. Kuwait, India, and the UAE were the top three suppliers to Singapore this week. Kuwait likely exported more naphtha to Asia this month, as an issue at its reformer resulted in more spare naphtha on hand for exports. More Saudi Arabian gasoline cargoes entered Singapore, adding to stocks. Singapore received another 800,000 bl of gasoline from the Mideast Gulf nation after already receiving similar volumes last week. Middle distillates stocks rose further to a six-week high, as jet fuel exports fell while imports rose. Swing supplies of jet fuel continued to arrive from India, with a 494,000 bl India jet fuel cargo imported into Singapore in the past week. Singapore's onshore fuel oil inventories retreated to a three-week low after climbing for two consecutive weeks, as imports fell sharply this week. But total inventories for November remained marginally higher at 17.78 mn bl,compared to 17.55 mn bl last month. Brazil, Indonesia, and Iraq were the top origin countries for fuel oil arrivals, while the majority of exports were bound for the Philippines and Hong Kong. No exports were recorded to China this week. By Aldric Chew, Asill Bardh, Cara Wong and Lu Yawen Singapore onshore stocks (week to 20 November '24) Volume ± w-o-w ± w-o-w (%) Light distillates Stocks 15.16 1.04 7.37 Naphtha imports 1.98 0.35 21.36 Naphtha exports 0.61 0.60 8,689.57 Gasoline imports 3.04 -0.53 -14.91 Gasoline exports 4.74 -0.35 -6.91 Middle distillates Stocks 10.27 0.63 6.56 Gasoil imports 0.61 -1.12 -64.79 Gasoil exports 3.48 1.36 63.82 Jet fuel imports 0.5 0.1 39.34 Jet fuel exports 0.20 -0.28 -58.34 Residual fuels Stocks 16.98 -1.37 -7.45 Fuel oil imports 2.19 -4.36 -66.61 Fuel oil exports 1.23 -2.04 -62.53 Source: Enterprise Singapore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Pemex's lean Zama spending undercuts goals

21/11/24

Pemex's lean Zama spending undercuts goals

Mexico City, 21 November (Argus) — State-owned oil company Pemex's limited budget for developing one of Mexico's most-promising new oil fields is putting Mexico's crude production and refining goals at risk through 2030. First production from the Zama field will likely not start until at least 2028 instead of late next year, as forecast earlier, based on a timeline in a recent presentation from Pemex. Pemex continues to work on the basic engineering for the Zama field because of the lack of cash, staff of hydrocarbon regulator CNH said last week. The latest delay on Zama echoes criticism from when Pemex took over operating the field in 2022 that it did not have sufficient experience or funds to carry on with the project, said industry sources. "Unfortunately, the Pemex budget is always a shadowy mystery," said a person close to the project who asked not to be named. "There is no transparency or certainty regarding when they do and do not honor payment commitments." Zama is a shallow-water field unified in 2022 between Pemex area AE-152-Uchukil and the discovery made in 2017 by a consortium led by US oil company Talos Energy. Pemex holds 50.4pc of the Zama project while Talos and Slim's subsidiary Grupo Carso have 17.4pc, German company Wintershall Dea 17.4pc and British company Harbour Energy 12.4pc. The state-owned company expects to spend $370.8mn to develop Zama in 2025, 64pc less than the original $1.05bn budget proposed by Pemex for next year, according to data from CNH. The regulator cleared the change last week, but commissioners questioned the CNH staff about the new delays. Pemex's original development plan showed that the company forecast the first crude production by December 2025, with 2,000 b/d and about 4mn cf/d of gas. The original plan forecast Zama hitting peak production of 180,000 b/d in 2029, making it Mexico's second-largest crude producer, only under the Maloob field. President Claudia Sheinbaum and Pemex's new new chief executive Victor Rodriguez flagged the importance of shallow-water field Zama and ultra deep field Trion to support Pemex's oil production target of 1.8mn b/d in the upcoming six years in a presentation last week. Pemex's new plan is focused on feeding its own refining system rather than crude exports. The company expects to increase gasoline, diesel and jet fuel production by 343,000 b/d, according to the plan, but it did not give a timeline. Pemex produced 491,000 b/d of gasoline, diesel and jet fuel in the first nine months of 2024. Mexico's proposed 2025 federal budget also shows lower spending for Zama, at Ps3.1bn ($154mn) for 2025, even less than the figure approved by CNH on 14 November. Neither Pemex not Talos responded to requests for additional comment. "Zama is the story of the triumph of ideology over practicality," said a Pemex source who asked not to be named. The state-owned company is studying how to bring in new investors to the project once congress approves secondary laws to implement recent energy reforms, the source said. But uncertainty over the legal framework and the general deterioration of Mexico's business climate will make this more difficult, the Pemex source added. The involvement of Mexican billionaire Carlos Slim, who acquired 49.9pc of Talos Energy share in Zama last year, brought new hopes that work at Zama could finally accelerate. Instead, Slim's entrance slowed the project, as the new partner had to review the project, a former regulator who asked not to be named said. Talos Energy, the lead operator when the field was discovered over seven years ago, is now "frustrated" by the poor progress of the project. "We have Mexico, a great discovery in Zama, we're seven years into it, and still have not made a final investment decision on it," said Talos Energy interim chief executive Joseph Mills, in a conference call with investors last week. "So a lot of frustration there, as you can imagine." By Édgar Sígler Pemex 2024 crude output, throughput '000 b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cost of government support for fossil fuels still high

21/11/24

Cost of government support for fossil fuels still high

London, 21 November (Argus) — The cost of government measures to support the consumption and production of fossil fuels dropped by almost a third last year as energy prices declined from record highs in 2022, according to a new report published today by the OECD. But the level of fiscal support remained higher than the historical average despite government pledges to reduce carbon emissions. In an analysis of 82 economies, data from the OECD and the IEA found that government support for fossil fuels fell to an estimated $1.1 trillion in 2023 from $1.6 trillion a year earlier. Although energy prices were lower last year than in 2022, countries maintained various fiscal measures to both stimulate fossil fuel production and reduce the burden of high energy costs for consumers, the OECD said. The measures are in the form of direct payments by governments to individual recipients, tax concessions and price support. The latter includes "direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates", the OECD said. These government interventions come at a large financial cost and increase carbon emissions, undermining the net-zero transition, the report said. Of the estimated $1.1 trillion of support, direct transfers and tax concessions accounted for $514.1bn, up from $503.7bn in 2022. Transfers amounted to $269.8bn, making them more costly than tax concessions of $244.3bn. Some 90pc of the transfers were to support consumption by households and companies, the rest was to support producers. The residential sector benefited from a 22pc increase from a year earlier, and support to manufacturers and industry increased by 14pc. But the majority of fuel consumption measures are untargeted, and support largely does not land where it is needed, the OECD said. The "under-pricing" of fossil fuels amounted to $616.4bn last year, around half of the 2022 level, the report said. "Benchmark prices (based on energy supply costs) eased, particularly for natural gas, thereby decreasing the difference between the subsidised end-user prices and the benchmark prices," it said. In terms of individual fossil fuels, the fiscal cost of support for coal fell the most, to $27.7bn in 2023 from $43.5bn a year earlier. The cost of support for natural gas has grown steadily in recent years, amounting to $343bn last year compared with $144bn in 2018. The upward trend is explained by its characterisation as a transition fuel and the disruption of Russian pipeline supplies to Europe, the report said. By Alejandro Moreano and Tim van Gardingen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Talks in Baku torn between mitigation and finance

21/11/24

Cop: Talks in Baku torn between mitigation and finance

Edinburgh, 21 November (Argus) — Developing and developed nations remain at loggerheads on what progress on climate finance and mitigation — actions to cut greenhouse gas emissions — should look like at the UN Cop 29 climate summit. But Cop 30 host Brazil has reminded parties that they need to stick to the brief, which is finance for developing countries. Concluding a plenary where parties, developed and developing, listed grievances, environment minister Marina Silva recognised "the excellent progress achieved" on mitigation at Cop 28. She listed paragraphs of the Cop 28 deal, including the energy package and its historic call to transition away from fossil fuels in energy systems. "We are on the right track," she said, talking about mitigation, but "our greatest obligation at this moment is to make progress with regard to financing". "This is the core of financing that will pave our collective path in ambition and implementation at Cop 30," Silva said, adding that $1.3 trillion for developing countries should be "the guiding star of this Cop". Parties are negotiating a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. But developed countries insist that a precise number for a goal can only be produced if there is progress on mitigation and financing structure for the NCQG. "Otherwise you have a shopping basket but you don't know what's in there," EU energy commissioner Wopke Hoekstra said. Some developing nations said they need the "headline number first". Some developing countries, including Latin American and African nations as well as island states, have also complained about the lack of mitigation ambition. Cop is facing one of the "weakest mitigation texts we have ever seen," Panama said. But they also indicated that financial support was missing to implement action. Developed countries at Cop 29 seek the implementation of the energy pledges made last year. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance and to operationalise that," but the text goes in the opposite direction, Hoekstra said, talking about the latest draft on finance. Whether hints that Brazil has mitigation in focus for next year's summit will be enough to assuage concerns from developed countries at Cop 29 on fossil fuel ambitions remains to be seen. The communique of the G20, which the country hosted, does not explicitly mention the goal to transition away from fossil fuels either. The developed countries' mitigation stance grew firmer after talks on a work programme dedicated to mitigation, the obvious channel for fossil fuel language, was rescued from the brink of collapse last week. Discussions have stalled, but another text — the UAE dialogue which is meant to track progress on the outcomes of Cop 28 — still has options referring to fossil fuels. But in these negotiations too, divisions remain. "The UAE dialogue contains some positive optional language on deep, rapid and sustained emissions reductions and the [Cop 28] energy package, climate think-tank E3G said. But Saudi Arabia has made clear that this was unacceptable, while India, which worked to water down a coal deal at Cop 26, is pushing back on the 1.5°C temperature limit of the Paris Agreement. Negotiators are starting to run out of time. Draft after draft, the divide fails to be breached with no agreement on an amount for the finance deal. "We cannot talk about a lower or higher number because there is no number," noted Colombia's environment minister Susana Muhamad. The next iteration should have numbers based on the Cop 29 presidency's "view of possible landing zones". The fact that the draft text on finance has no bridging proposal is a concern, non-profit WRI director of international climate action David Waskow said. Finance was always meant to be the centrepiece of Cop 29. Parties have not formally discussed the goal in 15 years, and have been trying to prepare for a new deal through technical meetings for the past two years. But the discussion needs to end in Baku. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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