ConocoPhillips steps up global push to collect PdV debt

Spanish Market: Crude oil, Oil products
23/09/21

ConocoPhillips stands out in Venezuela's vast universe of jilted creditors and claimants as a potential future commercial partner for state-owned PdV, a distinction that is driving aggressive international enforcement actions and quiet overtures for Caracas to resume payments of the company's arbitration debt.

The US independent's $10bn outstanding claims against Venezuela are the most significant among several now in flux behind the scenes as the Venezuelan government and US-backed opposition prepare to resume fragile political negotiations in Mexico this weekend.

ConocoPhillips is Venezuela's largest individual creditor, tied to two main international arbitration awards stemming from the 2007 seizure of its PetroZuata and Hamaca heavy crude joint venture interests and its participation in the offshore Corocoro field: $2bn from the Paris-based International Chamber of Commerce and $8.5bn from the World Bank's International Centre for Settlement of Investment Disputes (Icsid).

In a landmark 2018 agreement, PdV agreed to honor the ICC award with quarterly payments in cash or in kind. PdV paid around $754mn but defaulted in the fourth quarter 2019, blaming US sanctions that blocked access to its funds in Portugal's Novobanco, according to sources close to the parties.

The default prompted ConocoPhillips to resume enforcement actions that it had successfully deployed in the Dutch Caribbean, where it had relentlessly attached liens to PdV oil cargoes, storage and other assets to force the Venezuelan company into a payment deal, even though the value of the assets paled in comparison to the debt.

This year the Houston, Texas-based company is moving to attach shares of PdV's Dutch subsidiary Propernyn, which controls 15pc in European specialty refinery Nynas. A hearing in a Dutch court is expected to take place by year's end.

In reference to the remaining $1.25bn in the ICC debt, ConocoPhillips chief executive Ryan Lance told Argus yesterday that PdV has "an outstanding balance that they owe us so we are in discussions with them to repay that."

Caracas is seeking to annul the Icsid award altogether, a long-shot outcome that nonetheless buys time for the parties to hammer out a deal.

ConocoPhillips has a license from the US Treasury's Office of Foreign Assets Control (OFAC) to engage with PdV on the debt repayment.

The actions undertaken by ConocoPhillips in the Caribbean and the Netherlands come on top of its US litigation to claim the shares of Delaware-based PdV Holding in PdV's US refiner Citgo. The main plaintiff, Tenor Capital Management-controlled Crystallex, has steadfastly pursued its case that would lead to a sale of the Citgo shares once US protection is lifted, a watershed event that could take place early next year. A court-appointed special master has already issued a Citgo sale plan, but acknowledges that a superior pledge of Citgo shares held by PdV 2020 bondholders would likely impede the process.

Partner potential

For Venezuela's main political opposition represented by a crumbling interim government that controls Citgo, ConocoPhillips is seen as the most appealing creditor in a sea of mostly short-term interests, including defaulted bondholders and dealmakers looking to arrange debt-for-equity swaps.

ConocoPhillips, in contrast, had a long history in Venezuela before the 2007 nationalizations, and would be well-placed to participate in a rebuilding, all sides agree. The interim government is believed to have an "understanding" with the US company to honor the debt agreement, but it denied today that it has any separate payment agreement with the US company. The interim government has no real authority in Venezuela and even its US patron views its mandate as expiring in January 2022.

By Patricia Garip and Stephen Cunningham

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17/03/25

Carney to strike while iron, steel and aluminum are hot

Calgary, 17 March (Argus) — Newly minted Canadian prime minister Mark Carney will likely call a national election soon to both secure his seat in Canada's parliament and win a public mandate in the ongoing trade war with the US. Carney has helped revive the Liberal party's fortunes and narrow the gap between main rival Conservative leader Pierre Poilievre in recent weeks, raising the odds he will call for a national election soon. Poilievre has lost momentum because of rising anti-US sentiment in Canada while the governing Liberals have capitalized on newfound attention in what many in the country see as a fight against US president Donald Trump. An election would occur 37-51 days after being called, meaning Canadians could go to the polls as early as late-April. Because Carney did not hold elected office when his party chose him to succeed Justin Trudeau, he must also find a parliamentary seat to run for in the election. At the same time voters will be voting on all other seats in parliament, essentially putting the Liberal party's nine-year run leading the country in the balance. Parliament has been out of session for several months after Trudeau asked for an extension of a regular recess while his party chose a new leader. It is scheduled to return on 24 March although Carney could ask to extend it again. If it does return to session, Carney will be without a seat and unable to defend himself against Conservative attacks in the House of Commons. Until then, Carney will continue to lead Canada's response to the US-induced trade war, which has included tariffs on energy and a wide range of other imports imposed then removed earlier this month, as well as ongoing tariffs against steel and aluminum imports. A tight contest A virtual tie in the polls for Canada's two largest federal parties promises a tight race for the expected spring election where Carney will try to shake unpopular policies from Trudeau's time — some of which Carney had formerly endorsed — while addressing louder calls by Canadians for exporting energy to non-US countries. Both parties appear to like their chances, but the US-Canada trade war has meant Liberal ministers leading important areas of policy are dominating national media, leaving Poilievre searching for airtime. Poilievre warns voters that Carney is an out-of-touch elitist similar to his close ally Trudeau. Carney, who has held prominent roles in banking and on corporate boards, counters he has "actually worked in the private sector" while characterizing Poilievre as a lifelong politician. But Carney still knows he must distance himself from Trudeau. He began that process last week by using his power to eliminate the consumer carbon tax , beating Poilievre — who has been calling for this for years — to the punch. Diversifying trade, inter-provincially and internationally, is top of mind for both leaders, but the Liberals still seem reluctant to talk about oil pipelines, aside from the recently expanded and federally-owned 890,000 b/d Trans Mountain system. The system has provided flexibility for crude exporters looking to bypass the US and is now seen in a new light by many outside of the industry amid the trade war. Canada will be a superpower in "both conventional and clean energies" by creating new trade corridors with "reliable trade partners", Carney said on 14 March. But the country's largest oil producing provinces have their reservations. "Mark Carney is responsible for net zero banking," Alberta premier Danielle Smith said last week at the CERAWeek by S&P Global conference in Houston, Texas. "He's been on a war path against the energy industry his entire career." Saskatchewan premier Scott Moe meanwhile urged Carney to cancel this week's visit to Europe, his first international trip as prime minister, and instead prioritize escalating trade wars with both the US and China. "There are higher stakes at play here," Moe said. "We don't have a trade war with the European Union today." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

German gasoil demand rises but remains weak

17/03/25

German gasoil demand rises but remains weak

Hamburg, 17 March (Argus) — Wholesale diesel and heating oil sales in Germany continue to rise this year and supply is ample, particularly along the Rhine river. But demand remains weak compared with this time last year making imports uneconomical. Diesel demand is rising seasonally because of warmer temperatures and an associated uptick in agriculture and construction activity. Heating oil demand is being boosted by falling prices, which are as low as they were in December even with the increased German greenhouse gas (GHG) reduction quota and CO2 levy in place since the turn of the year. In the Rhine areas of western and southwestern Germany, the price of heating oil and diesel is lower than it is in northern, eastern and the southeastern Bavaria regions. This suggests that, partly because of ample refinery production in the west, available product exceeds current demand. Low Rhine water levels since the beginning of March, which reduce barge loadings upstream from Kaub, have not led to shortages. Another indication of low import demand is that freight rates have risen only slightly despite the low water levels and some canal closures. Argus ' calculations show spot imports from the Amsterdam-Rotterdam-Antwerp (ARA) hub along the Rhine would currently be loss-making. Maintenance work at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery north of Munich, which started in early March, is leading to the highest regional prices in Germany. Traded spot volumes are correspondingly low. Gasoil imports by sea cargo into northern Germany are at their lowest level in at least two years. This could contribute to the price in northern and eastern Germany being somewhat higher than in the west and southwest. German diesel demand in 2025 remains below average in a multi-year comparison. The main reason for this is declining industrial production and a resulting decrease in freight activity. The German truck toll index fell to its lowest February value in eight years. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump actions fuel trading uncertainty

17/03/25

Trump actions fuel trading uncertainty

Boca Raton, 17 March (Argus) — President Donald Trump's unpredictable actions on tariffs, foreign affairs and the economy are creating volatility in futures markets at a time of increased concerns about the stability of investments made in the US. Trump has roiled global markets by announcing — and sometimes retracting the same day — tariffs on Canada, Mexico, China and other trading partners without offering a clear explanation of what outcome he hopes to achieve. The Chicago Board Options Exchange's VIX volatility index, which uses options trades to track the likelihood of major stock market swings, has nearly doubled since Trump took office and hit a seven-month high last week. The pace and breadth of Trump's agenda are "surprising even his most ardent supporters" and resulted in markets having "mixed feelings" over his policies, Futures Industry Association president Walt Lukken said on 10 March at the International Futures Industry Conference in Boca Raton, Florida. According to a recent survey, the industry group's members identified tariffs as the top policy that could negatively affect markets, Lukken said. Trump's oft-stated desire to annex Greenland and Canada and his willingness to allow carmaker Tesla's chief executive, Elon Musk, to exert vast power in his administration without a clear conflict-of-interest policy have helped rattle investor confidence, European exchange Euronext chief executive Stephane Boujnah said on the sidelines of the conference. US assets could start trading at a discount because of concerns over the rule of law and an "oligarch risk" that usually exists in emerging markets, he said. "One of the features of the emerging market is that you invest, you own something, until the guy with gold who is close to the ruler wants it too," Boujnah said. Traders who in the past might have stayed away from markets during periods of volatility no longer have the "luxury to do that in the world that we live in today", CME Group chief executive Terrence Duffy said. "Globally, it's not going to go away, so it's something we all need to deal with," Duffy said. CME reported record trading volumes for natural gas futures and options in January and February, which company executives have attributed in part to years of growing US energy exports. "As the US continues to both produce and export crude and natural gas at record quantities, putting US physical products on the market, customers are coming to the main market to hedge that exposure," CME commodities global head Derek Sammann said on the sidelines of the conference. Double-edged sword Higher volatility can benefit exchanges, trading platforms and traders because their revenue is often tied to trading volumes. But too much volatility in markets can cause some traders to sit on the sidelines, resulting in increased price spreads between buyers and sellers, trading platform Trading Technologies executive vice-president of futures and options Alun Green said. "We're still in a well-established, well-worked volatile market, but I think that there are some areas where people are not quite as willing to go in and take risks," Green said. Trump's push for an across-the-board cut to regulations and his attempt to wrest control of the independent federal agencies that oversee financial markets could end up causing problems in markets if they eventually result in a market crash, according to some regulators. "I do fear sometimes when we whipsaw too much, that then things can get deregulated too much, and then we create some amount of risk that we then can't handle," US commodities regulator CFTC member Christy Goldsmith Romero, a Democratic appointee, said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US oil chiefs wary of Trump price push

17/03/25

US oil chiefs wary of Trump price push

New York, 17 March (Argus) — US oil chiefs have offered President Donald Trump their unequivocal backing for restarting the conversation around energy policy and climate change in their favour, but his push for lower oil prices is creating misgivings. Energy secretary Chris Wright told reporters at the CERAWeek by S&P Global conference in Houston last week that the administration's push for lower oil prices has no specific target level, but White House officials, including trade adviser Peter Navarro, have cited $50/bl as a preferred level that would help to bring down inflation. A decline to that level would have far-reaching repercussions for the shale patch and lead to lower production in the top-performing Permian basin, according to industry veteran Scott Sheffield. "The cash breakeven for the majors and independents is $50-55/bl including dividends," said Sheffield, one of the pioneers of the shale revolution in the Permian basin that turned the US into the world's biggest producer. "So at $50/bl oil, there's no free cash flow, there's no growth." Wright attempted to square the circle between Trump's call for lower crude prices and higher crude production at the same time, arguing that both goals could be achieved by removing barriers and developing more infrastructure under a strategy of "Build, baby, build". Executives from the US and European majors talked up prospects in the offshore Gulf of Mexico, which is enjoying a resurgence in interest as pioneering technology opens up previously inaccessible resources. But the industry needs to work with the administration to explain the unintended consequences of its tariff policies, pipe manufacturer Tenaris said, as they affect equipment used for deepwater development. In the shale, with most public operators pledging to keep spending down this year and growth to a minimum, few have thus far shown any appetite to open the floodgates. US major Chevron might forecast double-digit output growth from its Permian operations this year, but it is slowing its spending. "Chasing growth for growth's sake has not proven to be particularly successful for our industry," chief executive Mike Wirth said. "And so we're moving towards a plateau that will open up the free cash flow generation and then sustain that for a long period of time." Tech flows Consolidation has helped to improve financial performance and efficiency of the larger operators now dominating the Permian, giving them the ability to drive technology gains and improve recovery rates, according to ExxonMobil's new head of oil and gas production, Dan Ammann. "When you have a position like ours — with continuous acreage — it allows you to do things that others are unable to do, like very long laterals," he told the conference. "Today we are recovering 6-8pc of the total resource, so the ability to unlock increased recovery of that through technology is a great way to grow production." Occidental Petroleum's chief executive, Vicki Hollub , is advocating the use of enhanced oil recovery techniques with CO2 pulled in by direct air capture facilities — which remove CO2 from the atmosphere — like the projects Occidental is developing. Pilot tests in the Midland basin suggest the company could double recovery rates using this technique for shale, Hollub said. And even though growth in shale output looks set to reach a plateau by the end of the decade, industry leaders voiced optimism that its decline will be slow and future drilling breakthroughs, possibly driven by artificial intelligence, could yet prolong its lifespan. "Never bet against this industry in terms of technology," ConocoPhillips' chief executive, Ryan Lance, warned. "It will always figure out a way to get more resource out of the rock." By Stephen Cunningham US tight oil production Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil industry embraces Trump trade-offs

17/03/25

Oil industry embraces Trump trade-offs

Washington, 17 March (Argus) — President Donald Trump's key energy advisers lavished praise and promises of deregulation on US oil and gas executives attending the CERAWeek by S&P Global conference in Houston last week. But his domestic and international policies, and failure to explain their desired outcomes, have created significant uncertainty for investors in the energy sector and the broader economy. "I'm going to share two words that I don't think you have heard from a federal official in [former president Joe Biden's] administration during the last four years, and those two words are ‘Thank you'," interior secretary Doug Burgum told the conference. Burgum, appointed by Trump as chairman of a newly formed National Energy Dominance Council, projects that cutting oil and gas regulations and streamline permitting could trim $6-8/bl from US oil production costs. Burgum's assessment of the savings that the regulatory overhaul would yield is a way to reconcile Trump's demands on the industry to lower oil prices and at the same time push US crude output beyond what are already record levels. Trump on 12 March celebrated oil prices falling to $65/bl as another major win — even though Nymex sweet crude futures were closer to $70/bl that day — and some members of his economic team are eyeing the $50/bl mark . His energy team says it does not have a specific price target, but "the actions of this administration are to make it easier to produce more oil and natural gas" and encourage producers to invest more, energy secretary Chris Wright told the CERAWeek conference. Oil and gas executives for now appear grateful to be embraced by the White House, and attribute government interventions on trade and other fronts to the initial exuberance of a new administration. Wright's denunciation of what he called Biden's "irrational, quasi-religious climate policies" was well received and set the tone for the conference. Even Adnoc chief executive Sultan al-Jaber , who just two years ago labelled his fellow oil executives' view on climate change as problematic, recast the problem and pronounced it to be solved. "The world is finally waking up to the fact that energy is the solution," al-Jaber said. Permitting pay-offs later... But concerns about new sources of regulatory uncertainty are starting to mount. Approving specific pipeline and other energy projects by executive fiat needs to be backed by legislation that makes permitting reform possible, Chevron chief executive Mike Wirth told the conference. And Trump is making it increasingly difficult to pass off his tariff policies as a mere negotiating tactic. His trade actions are proving to be sticky — even the temporary relief for Canada tariffs has forced market participants to scramble to prove that the energy trade is covered by the US-Canada-Mexico free trade agreement terms and is thus tariff-free, Alberta's minister of energy and minerals, Brian Jean, said. OECD energy watchdog the IEA on 13 March downgraded its global oil demand growth forecast for 2025, noting a deterioration in macroeconomic conditions driven by rising trade tensions. The agency envisages a larger supply surplus as a result — a surplus that could be greater still, depending on Opec+ policy. The Trump administration casts its declaration of an "energy emergency" as the best way to address long-standing complaints across the energy industry about the lengthy permitting process and multiple layers of federal and state-level oversight. "We will identify where the overlap is, we will identify where the overreach is... then we're going to help solve the problem and identify what else we can just get rid of in the federal government," Burgum told the conference. But he and other administration officials have already indicated that they expect the main beneficiaries to be the oil, gas and coal industries, making it easier to expand production, authorise pipelines and approve new coal and gas-fired power plants, and to even force coal-fired plants that have already been mothballed to reopen. The Environmental Protection Agency on 12 March said it will revise more than 30 climate regulations that were issued under Biden, including CO2 limits for power plants and automobiles, national air quality standards and methane limits for the oil and gas sector. Midstream company Williams' chief executive, Alan Armstrong, said that the permitting shortcuts outlined by the Trump administration would more than offset the higher cost of steel used in pipes as a result of new tariffs . Armstrong, who estimates permitting costs to be twice as high as the cost of pipeline materials, said that "we'd be glad to pay the 25pc tariffs as long as we can get the permits done". He also said he is hopeful that durable legislation relaxing infrastructure permitting rules will be passed under the new administration. But industry group American Petroleum Institute president Mike Sommers, while praising Trump's deregulation agenda, offered a more sober outlook on the possibility of a long-discussed overhaul of federal permitting through federal legislation. Congress' failed effort to amend permitting laws last year "should be the basis upon which all other permitting bills are built", Sommers said. But, he cautioned, "we all have to be realistic about the partisan make-up of Congress and the difficulty of getting 60 votes" in the Senate, where the Republican majority is 53-47. The new gas-fired power plants and nuclear power investment that Trump wants might prove insufficient for meeting surging US power demand for artificial intelligence (AI) data centres this decade, US utility NextEra chief executive John Ketchum said, noting his company's continued preference for adding renewable generation. "There's a timing difference… and there's a cost difference" between renewables and other generation sources, Ketchum said, noting that the cost of new gas-fired generation has more than tripled since 2022. ...uncertainty now Oil and gas producers might feel reinvigorated by Trump's promise of deregulation, but energy traders say that his unpredictable actions on tariffs, foreign affairs and the economy are creating volatility in futures markets at a time of increased concern about the stability of investments made in the US. The Chicago Board Options Exchange's VIX volatility index — which uses options trades to track the likelihood of major stock market swings — has nearly doubled since Trump took office and hit a seven-month high last week. The pace and breadth of Trump's agenda are "surprising even his most ardent supporters" and resulting in markets having "mixed feelings" over his policies, Futures Industry Association president Walt Lukken said on 10 March at the International Futures Industry Conference in Boca Raton, Florida. Lukken cited a recent survey of the industry group's members, which identified tariffs as the policy that could most negatively affect markets. Trump's oft-repeated stated desires to annex Greenland and Canada and his willingness to allow Tesla chief executive Elon Musk to exert vast power in his administration without a clear conflict-of-interest policy have helped to further rattle investor confidence, European exchange Euronext's chief executive, Stephane Boujnah, said. US assets could start trading at a discount because of concerns over the rule of law and an "oligarch risk" that more usually exists in emerging markets, he said. "One of the features of the emerging market is that you invest, you own something, until the guy with gold who is close to the ruler wants it too," Boujnah said. By Haik Gugarats, Julian Hast and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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