US blocks bondholder takeover of Citgo

: Crude oil
19/10/24

Venezuela's main political opposition has won a three-month reprieve from the US to restructure a $914mn obligation backed by shares in state-owned PdV's coveted US refining asset, Citgo.

The US Treasury Department's Office of Foreign Assets Control (OFAC) today blocked a potential takeover of Citgo by holders of a PdV 2020 bond until 22 January. Without that action, the bondholders could have exercised their right to seize 50.1pc of Citgo if they did not receive $842mn in principal and $72mn in interest on 27 October.

The bondholders will be unable to carry out any transactions with the bond, including trying to seize the Citgo shares pledged as collateral, between 24 October- 22 January, OFAC said in a guidance.

"To the extent an agreement may be reached on proposals to restructure or refinance payments due to the holders of the (PdV 2020) percent bond, additional licensing requirements may apply," OFAC said. The agency, which enforces the US sanctions programs, said it "would encourage parties to apply for a specific license and would have a favorable licensing policy toward such an agreement."

Venezuelan National Assembly speaker Juan Guaido's shadow administration, which has nominal control over Citgo but no authority over PdV, says it is unable to pay. It had asked the US administration to intervene to prevent a takeover of Citgo by the bondholders.

A senior US State Department official earlier this week indicated that Washington preferred to facilitate a negotiated agreement between the Guaido authority and the bondholders, instead of taking the legally challenging step of preventing the US holders of the debt from enforcing their rights.

The decision today effectively sets aside more than three months to negotiate a settlement. Today's action temporarily revokes an exemption the PdV 2020 bondholders received last year from the terms of an executive order issued by President Donald Trump, which prohibited most transactions with Venezuelan sovereign and PdV bonds.

Talks with some bondholders already started after a resolution passed by Venezuela's opposition-controlled national assembly on 15 October declared the bond unconstitutional. In the longer term, what some already view as an effective debt repudiation by Guaido could alienate the very lenders a future Venezuelan government will need to rebuild the country. Reconstruction of its oil-based economy is expected to cost as much as $200bn.

The US administration recognizes Guaido as the country's interim leader. The US imposed sanctions on PdV in January in a bid to force out Venezuelan president Nicolas Maduro's government. But Maduro remains in control of the country even though the sanctions have pushed down oil production and exports compared with last year.

PdV's crude output averaged about 730,000 b/d on 18 October, up from about 650,000 b/d at the end of September, but still below the 1.2mn b/d pre-sanctions level, according to Argus estimates.

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25/04/14

Ecuador's Noboa wins reelection with ample margin

Quito, 14 April (Argus) — Ecuador's president Daniel Noboa won reelection in a run-off on Sunday with 56pc of the vote, a wider margin than projected after a tight first-round race in February . Electoral authority (CNE) head Diana Atamaint confirmed the results with 93pc of votes counted. Noboa will hold office through May 2029. Security has topped voters' concerns as gang violence has increased in recent years, and Noboa has vowed a tough approach on crime. He also wants to attract more private-sector investment to Ecuador's energy sector, with hopes of boosting crude production of about 467,000 b/d. His challenger, Luisa Gonzalez, obtained only 44pc, but she did not recognize Noboa's win and has called for a recount. She belongs to the left-wing Revolucion Ciudadana party, sponsored by former president Rafael Correa, a close friend of presidents Nicolas Maduro of Venezuela and Daniel Ortega of Nicaragua. She promised more state-led energy-sector investment. Noboa won with a difference of about 1.1mn votes out of the 10.5mn Ecuadorians that voted, the CNE said. He called the results overwhelmingly in his favor, speaking from his residency in Santa Elena province. He will hold office through May 2029. The Organization of American States (OAS) declared the voting process normal based on the participation of 84 of its observers. None of the 40,000 observers from Gonzalez's Revolucion Ciudadana party or Noboa's ADN party denounced irregularities. Noboa will continue in power with no single party holding a majority in the national assembly, Ecuador's 151-member unicameral congress, based on results from the 9 February congressional and first-round presidential election. Revolucion Ciudadana will have the first minority with 67 members, followed by ADN with 66 members and 18 members from another five parties. Noboa will be sworn in on 24 May. He took office in November 2023 to fulfill the mandate of former president Guillermo Lasso, who dissolved the national assembly in May 2023 and called for anticipated elections. By Alberto Araujo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Keystone oil pipeline to restart by 15 April

25/04/13

Keystone oil pipeline to restart by 15 April

Houston, 13 April (Argus) — The 622,000 b/d Keystone crude pipeline is expected to resume service by 15 April, following a leak in North Dakota that shut deliveries last week. Calgary-based pipeline operator South Bow said the repair and replacement of the leaking section of pipe was taking place over the weekend. Once the company meets the terms of a corrective action order (CAO) issued by the US Pipeline and Hazardous Materials Safety Administration (PHMSA), it will be able to resume service. The pipeline has been off line since early on 8 April, when a leak was discovered in a rural field near Kathryn, North Dakota. An estimated 3,500 bl of crude was released but did not appear to have reached any waterways. "Keystone is targeting restoration of service and energy deliveries by Tuesday April 15, 2025, under the requirements of the CAO," South Bow said. "South Bow will require approval from PHMSA prior to restarting the pipeline." Under the CAO, South Bow must run metallurgical testing of the failed section of pipe, conduct a root cause analysis and meet other requirements. The pipeline system will also have to comply with certain pressure restrictions on Canadian sections of the line. The Keystone system is a major route for Canadian heavy crude destined for both the US midcontinent and the US Gulf coast, delivering about 15pc of the roughly 4mn b/d that the US imports from its northern neighbor. The line runs from the Canadian production and storage hub at Hardisty, Alberta, to Steele City, Nebraska, before splitting in two to head toward Illinois and the Gulf coast. Discounts for Western Canadian Select (WCS) at Hardisty to the CMA Nymex narrowed at the end of last week despite the shutdown, because of low inventories in Hardisty and open pipeline space on Canadian crude pipelines, including Enbridge's 3mn b/d Mainline system to the US midcontinent and the 890,000 b/d Trans Mountain pipeline to the Canadian Pacific coast. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ overproducers cast doubt on compensation pledges

25/04/11

Opec+ overproducers cast doubt on compensation pledges

Output is set to rise in the coming months, with Kazakhstan and Iraq unlikely to live up to commitments to rein in production, writes Aydin Calik London, 11 April (Argus) — The Opec+ alliance's planned production increases in April and May should, in theory, be offset by pledges to compensate for past overproduction, particularly by Kazakhstan and Iraq. But there are few signs that either country will significantly reduce output in the coming weeks. If anything, Kazakhstan has signalled that production will continue at or near record levels of around 1.8mn b/d , putting it some 300,000 b/d above its Opec+ target. Opec+ members subject to targets cut output by 90,000 b/d to 33.93mn b/d in March, according to Argus estimates, but this was still 80,000 b/d above the group's collective crude production target of 33.85mn b/d. The decision by a core group of eight Opec+ members to accelerate the return of 2.2mn b/d of production cuts is a key reason for the recent slide in oil prices, alongside US tariff announcements. But Opec+ has stressed that its implied output increase of 137,000 b/d for April and another 411,000 b/d in May should be cancelled out by compensation-related cuts of 249,000 b/d for April and 309,000 b/d in May. In reality, this is unlikely to happen — the group's output is set to rise. Kazakhstan is the main reason why Opec+ has exceeded its target over the past two months. Kazakh production has surged following a major output increase at the Chevron-led Tengiz field in January — part of the field's future growth project (FGP). Tengiz production rose to a record 901,000 b/d in March, compared with previous levels of 600,000-660,000 b/d. The increase came several months earlier than anticipated, Kazakh officials say, and they have subsequently asked international oil companies that operate Tengiz and the Kashagan oil field to reduce output. But the answer has so far been negative. "Unfortunately, we have not yet agreed with them to the reduction, because for them it is a very challenging action, especially Chevron, [which] spent $50bn on the FGP project. They told us it's not possible for them to reduce [output]," deputy energy minister Alibek Zhamauov said this week. Kazakhstan will try to reduce production from smaller fields operated by domestic producers such as state-controlled Kazmunaigaz, Zhamauov said. But any decrease from these fields will not be enough to offset the rise from Tengiz. Target practice Iraq's output dipped below its 4mn b/d target in March at 3.98mn b/d, but this was still well above the country's effective target of 3.88mn b/d under its compensation plan. If Iraq's past production record is anything to go by, its output is unlikely to fall much further in the months ahead. While Kazakhstan and Iraq are unlikely to see much change in their production, members such as Saudi Arabia and the UAE are set to drive the alliance's output higher. The biggest increase is expected from Saudi Arabia, which will see its 8.98mn b/d target rise by 222,000 b/d by May, offset only marginally by its compensation plans. Riyadh has already signalled that it is preparing to increase production after state-controlled Saudi Aramco cut the official formula price of its May-loading crude exports. The largest cut was for buyers in Asia-Pacific, Saudi Arabia's biggest market. Formula prices can indicate intentions on output, as producers fine-tune how affordable their crude is for marginal refiners. The second-largest production increase is set to come from the UAE, which has long been eager to raise output . The UAE will see its target rise by 103,000 b/d by May, which will also only be offset marginally by its compensation plan. Russia is also scheduled to deliver a significant production increase over the next two months, with its target rising by 105,000 b/d. But all of this increase will be cancelled out if the country sticks to its compensation plan. Opec+ crude production mn b/d Mar Feb* Mar target† ± target Opec 9 21.22 21.36 21.23 -0.01 Non-Opec 9 12.71 12.66 12.62 0.09 Total Opec+ 18 33.93 34.02 33.85 0.08 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Mar Feb* Mar target† ± target Saudi Arabia 8.98 8.93 8.98 0.00 Iraq 3.98 4.05 4.00 -0.02 Kuwait 2.42 2.43 2.41 0.01 UAE 2.91 2.93 2.91 -0.00 Algeria 0.92 0.92 0.91 0.01 Nigeria 1.49 1.58 1.50 -0.01 Congo (Brazzaville) 0.26 0.24 0.28 -0.02 Gabon 0.20 0.22 0.17 0.03 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.22 21.36 21.23 -0.01 Iran 3.34 3.38 na na Libya 1.36 1.39 na na Venezuela 0.87 0.84 na na Total Opec 12^ 26.79 26.97 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Mar Feb* Mar target† ± target Russia 8.97 8.96 8.98 -0.01 Oman 0.75 0.75 0.76 -0.01 Azerbaijan 0.47 0.47 0.55 -0.08 Kazakhstan 1.79 1.76 1.47 0.32 Malaysia 0.36 0.36 0.40 -0.04 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.10 0.09 0.08 0.02 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.07 0.07 0.12 -0.05 Total non-Opec 12.71 12.66 12.62 0.09 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US consumer sentiment 2nd lowest on record: Survey

25/04/11

US consumer sentiment 2nd lowest on record: Survey

Houston, 11 April (Argus) — US consumer sentiment fell for a fourth straight month in April, reaching lower levels than during the Great Recession in 2008, as inflation expectations surged to four-decade highs. The preliminary consumer sentiment gauge fell to 50.8 in April, below the 55.3 end-of-month level it reached in November 2008 during the start of the Great Recession, according to the University of Michigan's preliminary reading for April. The only lower reading in records going back to 1952 was in mid-2022 during Covid-19. Year-ahead inflation expectations surged to 6.7pc this month, the highest reading since 1981, from 5pc last month. Sentiment fell by 10.9pc from 57 in March and has lost more than 30pc since December 2024 "... amid growing worries about trade war developments that have oscillated over the course of the year." "Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate," the survey said. The index of current economic conditions fell to 56.5 in April from 63.8 the prior month. The index of consumer expectations fell to 47.2 this month from 52.6 in March. The proportion of consumers who expect unemployment to rise in the year ahead rose for a fifth month and is more than double the November 2024 result. Interviews for the report were done between 25 March and 8 April, ending prior to the 9 April partial reversal of US tariffs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EIA slashes WTI outlook by $7/bl on trade uncertainty

25/04/10

EIA slashes WTI outlook by $7/bl on trade uncertainty

Calgary, 10 April (Argus) — The US light sweet crude benchmark will be nearly $7/bl lower this year than previously expected, with an ongoing trade war stifling global demand by nearly 500,000 b/d, the Energy Information Administration (EIA) said today. WTI at Cushing, Oklahoma, is expected to average $63.88/bl in 2025, the agency said in its latest Short-Term Energy Outlook (STEO), lower by $6.80/bl from its March forecast. It will fall further to $57.48/bl in 2026, or $7.49/bl lower from the prior STEO. Brent prices saw similar downward revisions and is now forecast at $67.68/bl in 2025 and $61.48/bl in 2026. The latest STEO was to be released on 8 April, but the EIA said it needed more time to rerun its models in light of last week's sweeping tariff action by US president Donald Trump and subsequent retaliation by China. The protectionist measures have led major banks to cut oil price forecasts amid growing concerns over a stagnating US economy. The EIA completed its analysis on 7 April meaning it did not incorporate the most recent developments, including Trump's 9 April pause on the highest levels of punitive tariffs against key US trading partners and an increase in Chinese tariffs . The latest forecast is "subject to significant uncertainty," said the EIA. Global consumption of oil and liquid fuels is now expected to average 103.64mn b/d in 2025, lower by 490,000 b/d from the previous forecast. Consumption in 2026 is forecast at 104.68mn b/d, lower by 620,000 b/d. Global production meanwhile was lowered by to 104.1mn b/d for 2025 and to 105.35mn b/d for 2026. These are lower from the prior forecast by 70,000 b/d and 43,000 b/d, respectively. In the US, domestic consumption is projected to average 20.38mn b/d in 2025, lower by 70,000 b/d compared to last month's STEO. Consumption was lowered for 2026 by 110,000 b/d at 20.49mn b/d. Domestic production will come in at 13.51mn b/d in 2025 and 13.56mn b/d in 2026, the EIA said. This is lower by 100,000 b/d and 200,000 b/d, respectively, compared to the March STEO. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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