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Third Circuit rejects Citgo rehearing

  • Spanish Market: Crude oil, Oil products
  • 21/11/19

Federal appeals court judges have denied Venezuela's request to rehear a July decision upholding the pursuit of the country's US refining subsidiary Citgo to satisfy billions of dollars of debts.

The US Third Circuit Court of Appeals denied a request to hear arguments on the case in front of a full panel of judges. A three-judge panel affirmed in July that creditors and entities seeking compensation for expropriations could pursue shares of the refiner's controlling company in the US.

Attorneys for Venezuela's opposition leaders, which represent Venezuela in US courts, could not be immediately reached for comment. But those leaders separately received other protections from the US Treasury Department, which clarified that any settlement agreements or the enforcement of liens and judgments transferring Venezuelan property in the US would be blocked unless specifically licensed by the Office of Foreign Assets Control.

Citgo's 750,000 b/d of complex US refining capacity and associated pipelines and terminals have offered the most lucrative target for Venezuelan creditors seeking more than $150bn. More than a dozen companies, bondholders and other entities have filed to have their debts, including arbitration awards for expropriated assets, recognized in US courts.

Such recognition allows the parties to pursue a trail carved by former Canadian mining firm Crystallex, now controlled by investment firm Tenor. Crystallex successfully argued that Citgo and its controlling holding companies represented an alter ego of Venezuela and its national oil company, PdV. The decision meant that Citgo could be attached to satisfy those debts.

US foreign policy over the past year has complicated those efforts. The US and most western governments recognize National Assembly leader Juan Guaido as Venezuela's interim president, issuing sanctions in January to cripple the country's oil company and loosen the grip of president Nicolas Maduro. But Maduro has held firm to most of the country's institutions, leaving US-based Citgo the only clear demonstration of Guaido control.

The Guaido government have recently entered the US court system as plaintiffs, seeking to overturn debt the opposition-controlled National Assembly says was taken on illegally. The Guaido government and the bondholders agreed to a forbearance last week that pauses execution of their claim to Citgo, with arguments over the debt scheduled in a US court for next spring.

By Elliott Blackburn


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08/11/24

Argentina’s YPF sees jump in shale oil output

Argentina’s YPF sees jump in shale oil output

Montevideo, 8 November (Argus) — Argentina's state-owned YPF saw output of unconventional crude surge by 36pc to 126,000 b/d in the third quarter of the year compared to a year earlier. YPF's third quarter statement put total production at 559,000 b/d of oil equivalent (boe/d) with crude at 256,000 b/d, up by 8pc, and natural gas at 40.3mn m³/d, or 253,000 boe/d, an increase of 7pc, and 49,000 boe/d of natural gas liquids, up by 4pc. Unconventional crude accounted for 49pc of overall output. It was 39pc of total production a year earlier. YPF is the major player in Vaca Muerta, Argentina's unconventional formation that holds an estimated 16bn bl of crude and 308 trillion cf of gas, according to the US Energy Information Administration. The formation is at the heart of YPF's plans for Argentina to produce 1mn bl of crude and export up to 30mn metric tonnes/yr of LNG by the end of the decade. YPF is now Argentina's largest crude exporter, dispatching an average of 40,000 b/d in the third quarter, nearly all of this going by pipeline to neighboring Chile, according to Federico Barroetavena, chief financial officer. He said the company invested $1.35bn in the third quarter, with more than 70pc on upstream. It drilled 50 wells in the third quarter. YPF is moving ahead with its southern Vaca Muerta oil pipeline as it looks for partners for the full project. It has completed 50pc of the first 130km (81.4mi) segment. The second 440km, as well as storage tanks and a monobuoy platform, will require $2.5bn. The company anticipates construction to start in the first quarter of 2025. The initial capacity will be 180,000 b/d in 2026, increasing to 500,000 b/d in 2027 and, eventually, to 700,000 b/d. YPF is also the largest shareholder, with 37pc, in the Oldelval pipeline from Vaca Muerta to the coast. It is undergoing an expansion to 530,000 b/d in 2025. The state-owned energy company, Enarsa, completed in October the reversal of the country's northern gas pipeline to move Vaca Muerta gas to the north of the country. It will move more than 15mn m³/d of gas to northern Argentina. It previously moved gas from northern gas fields, now depleted, and Bolivia, to the capital, Buenos Aires. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Fund woes to hit Australian post-winter bitumen imports


08/11/24
08/11/24

Fund woes to hit Australian post-winter bitumen imports

Singapore, 8 November (Argus) — Australia's bitumen import demand following its June-August winter is anticipated to fall by about 20pc on the year because of prolonged funding issues and a lack of big paving projects, market participants told Argus . Australia continues to be plagued by budget and funding issues, with the country still reeling from the effects of the Covid-19 pandemic. Less funding has been allocated to road maintenance works this year and most of the local councils have decided to spend their budgets on other key sectors such as healthcare. Funding levels have overall been on a downtrend since 2020, market participants added. Although demand has risen since mid-October compared to the previous months this year, consumption levels remain unchanged from the same period in the last year as most projects are small and revolve around filling potholes, market participants said. Bitumen consumption is expected to be around 10-20pc lower on the year in 2024, the participants added, with some noting that the situation is unlikely to improve for at least two more years because of higher inflationary pressures in the country. Most importers in Australia currently have enough inventory to last until January 2025 and are not looking to procure spot cargoes on top of their term import commitments, and small volumes can be procured from the local suppliers if required, they said. Roads in Australia are set to get a maintenance boost, especially in parts such as southern Australia, according to the minister for regional development, local government and territories, but market participants argued that what "road projects" encompass has changed over the years and now includes other elements of maintenance such as grass cutting, construction of safety barriers and traffic lights, which do not involve road paving or bitumen. Of the entire budget allocated by the government, only around a third or less goes to road maintenance and paving works, Australia-based importers said. There was also a dip in demand from western Australia as authorities delayed pricing contracts for paving projects because of budgeting constraints. Australia imported around 488,874t of bitumen from January-August, according to Australian Petroleum Statistics data, compared to 605,283t from January-August 2023. Bitumen imports totalled around 932,286t in the whole of 2023, up from 915,467t in 2022. New Zealand demand to rise Conversely, New Zealand's import demand is expected to rise on the back of firm domestic consumption. Market participants in New Zealand said post-winter consumption and sales could be 3-4pc higher than the same time in 2023, which was already a record year for some importers. Importers noted the country is well on track to bringing in about 160,000-170,000t of bitumen this year. The weather has also been dry, making it conducive for road construction works. With the clear weather expected to carry on into summer, which falls between December and February, market participants said they are using this year-end period to stock up on inventory levels before the Christmas break in December. Most companies are likely to see a slowdown in road works by mid-December as contractors will leave for year-end breaks. It is important to buy enough supplies for the new year, said market participants, as February and March are usually the peak paving months for New Zealand. New Zealand imported about 54,000t in the first half of this year, compared to 144,220t during the same period last year, according to GTT data. The region imported 180,576t last year, compared to 200,615t in 2022. By Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Hungary’s Mol cuts forecast for 2024 refinery runs


08/11/24
08/11/24

Hungary’s Mol cuts forecast for 2024 refinery runs

Budapest, 8 November (Argus) — Hungarian integrated oil firm Mol has revised down its 2024 forecast for crude runs at its two landlocked refineries after a "turnaround-heavy" third quarter, it said today. The company expects to refine around 11.5mn t of crude combined at the 161,000 b/d Szazhalombatta plant in Hungary and the 115,000 b/d Bratislava complex in Slovakia this year, down from its previous guidance of about 12mn t. The two refineries processed 8.25mn t of crude in January-September, down from 9.09mn t a year earlier. Their combined crude throughput was down by 11pc on the year at 2.81mn t in the third quarter. Mol carried out scheduled maintenance at Szazhalombatta between 26 July and 19 September and expects to complete maintenance work on petrochemical units at Bratislava in the first half of November. Crude intake at Mol's third refinery, the 90,000 b/d Rijeka plant on Croatia's Adriatic coast, rose by 2.6pc on the year to 802,000t in the third quarter and was largely unchanged year-on-year at 1.26mn t in January-September. The company's crude throughput forecast only includes the Hungarian and Slovakian refineries. Mol cut the share of imported crude in its overall slate to 3.35mn t, or 93pc, in the third quarter from 3.8mn t, or 97pc, a year earlier, while it almost doubled intake from its own crude production to 255,000t in July-September from 129,000t in the same period last year. Szazhalombatta and Bratislava mostly process Russian crude received through the Druzhba pipeline system under an EU oil ban waiver, while Rijeka mainly takes non-Russian seaborne crude. The profitability of Mol's refining business was hit by a 71pc year-on-year fall in its refinery margin indicator — calculated based on the Dated Brent crude benchmark — to just $3.70/bl in July-September. Its oil product sales fell by 4.2pc from a year earlier to 4.88mn t in the third quarter. This included 1.52mn t of products Mol had to buy from third parties to complement its own output and satisfy demand, a significant rise from 1.25mn t of third-party oil products it sold a year earlier. The firm's upstream oil and gas production rose by 11pc on the year to 96,100 b/d of oil equivalent (boe/d) in the July-September quarter. It has raised its full-year forecast to about 92,000-94,000 boe/d from previous guidance of around 90,000 boe/d. Mol's profit fell to 111.5bn forint ($295mn) in the third quarter from Ft175.8bn a year earlier. By Béla Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US extends oil service firms' Venezuela waiver


07/11/24
07/11/24

US extends oil service firms' Venezuela waiver

Washington, 7 November (Argus) — The outgoing administration of US president Joe Biden extended authorization for oilfield services companies Halliburton, SLB, Baker Hughes and Weatherford to continue working in Venezuela until 9 May 2025. The waiver allows the service companies to pay their staff and maintain limited operations, but it prevents them from drilling new wells or otherwise contributing to state-owned PdV's production and exports. The Biden administration reimposed sanctions on Venezuela's oil sector in April, after a six-month reprieve. The sole exemption is a waiver for Chevron allowing it to import oil into the US from its joint venture with state-owned PdV. US crude imports from Venezuela averaged 212,000 b/d in January-August, US Energy Information Administration data show. Chevron's Venezuela output has stood at about 200,000 b/d. Neither president-elect Donald Trump nor his campaign addressed the Venezuela sanctions regime or indicated if they would change it. Republicans in Congress ahead of the election called for the Chevron exemption to be revoked. The Biden administration separately extended a prohibition for holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in US refiner Citgo's holding company to exercise their claim, this time until 7 March 2025. The PdV bondholders in theory hold a superior claim to Citgo Holding — a legal entity that directly owns Citgo and, in turn, is owned by Citgo parent company PdVH. A federal court in Delaware recently oversaw an auction of PdVH shares that yielded a $7.3bn bid from a company backed by investors including Elliott Investment Management. Legal wrangling over the bids and the distribution of auction proceeds is likely to keep Citgo ownership unresolved in the near term. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Mexican peso plummets on Trump win


06/11/24
06/11/24

Mexican peso plummets on Trump win

Mexico City, 6 November (Argus) — The Mexican peso fell sharply against the US dollar as markets priced in potential retaliation against Mexico following former president's Donald Trump's victory in the US presidential election. "A Republican Senate majority and potential House win raise the chances of Trump's radical reforms, which could hurt Mexico's economic dynamism," said a financial analyst from Mexican bank Monex in a note today. The peso initially dropped around 3pc to Ps20.71/$1 early today, hitting a two-year low before recovering to Ps20.20/$1 by midday. The peso may weaken further, as Mexico is vulnerable to tariff hikes amid strained relations over issues like immigration and the opioid crisis, according to a desk report from a major Mexican bank. Trump repeatedly threatened tariffs on Mexico during his presidential campaign, most recently pledging a 25pc tariff on all Mexican imports unless President Claudia Sheinbaum's administration launches a severe crackdown on Mexico's drug cartels, which ship fentanyl and other drugs across the border to the US. Recent constitutional amendments in Mexico, including judicial reforms and proposed eliminations of independent regulators, may also add downward pressure on the peso, according to the report. "The government's goal to direct private-sector involvement could limit market forces," it noted. Mexico's state-owned oil company Pemex typically offsets peso depreciation due to its dollar-denominated oil export revenues, which help cover increased import costs. "Pemex's exports and domestic sales are tied to international hydrocarbon prices, providing a natural hedge," the company stated in its most recent report. Still, analysts warn that Pemex's focus on domestic refining over crude exports could erode this hedge, leaving it more exposed to foreign exchange swings on USD-denominated debt. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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