Citgo rivals dig trenches over delinquent debt

: Crude oil, Oil products
19/11/04

A group of bondholders is urging the White House to untie its hands in an increasingly acrimonious struggle with Venezuela's political opposition over US refiner Citgo, the Opec country's most valuable international asset.

In a statement today, the Venezuela Creditors Committee (VCC) said a 28 October lawsuit by an opposition-appointed board in exile of Venezuelan national oil company PdV is "tantamount to a repudiation" of the company's obligations.

The opposition lawsuit was filed in New York Southern District against two trustees of PdV 2020 bonds that are collateralized by 50.1pc of the shares in Citgo's parent. The objective of the legal action is to obtain a declaration that a 2016 swap that led to the issuance of the overdue 2020 bond is invalid.

The lawsuit came as a surprise to the bondholders, as it was filed on the heels of a 24 October White House order that blocked them from exercising their right to the PdV 2020 collateral of Citgo shares for a 90-day period, ending 22 January 2020.

The US government action was widely seen as an effort to get both sides to reach a consensual agreement on the controversial bond, which had been the only Venezuelan debt not in default until a $914mn principal and interest payment was missed on 28 October.

The "ad hoc" administrative board of PdV was named by Juan Guaido, the Venezuelan opposition leader who is recognized by more than 50 Western nations as the country's interim president. While the US government gave its blessing to Guaido's administrative control over Citgo after he declared his interim presidency on 23 January, PdV itself is still controlled by Venezuela's incumbent president Nicolas Maduro, who has resisted a 10-month US-backed campaign to oust him. Maduro is still recognized as Venezuela's head of state by the UN, as well as Russia, China, Turkey and Cuba, among other nations.

In its statement today, the VCC said the Maduro opponents' legal actions "stand in stark contrast to their commitment to an orderly and consensual renegotiation of Venezuela's public external debt" that they had pledged to fulfill in debt guidelines issued three months ago.

The ad hoc PdV board and Guaido's debt committee have not responded to today's VCC statement.

The committee added that the lawsuit was "unnecessary" because in the months prior to the October missed payment deadline, it offered on "numerous occasions to facilitate a consensual refinancing" of the 2020 Bonds with the express purpose of ensuring that Venezuela could preserve its ownership of Citgo pending a consensual restructuring of Venezuela's public external debt. But the Guaido government declined to acknowledge or respond to the offer of assistance, the committee said.

The VCC goes on to reject the Guaido board's argument that the debt is invalid because the 2016 swap lacked approval by the opposition-controlled National Assembly, and calls on the Guaido team to reverse course if it wants an orderly and consensual outcome.

"If the Guaido Government is intent on seeking the nullity of the 2020 Bonds, then it is only fair that the holders of these Bonds be able to defend and pursue their rights in full," the VCC said. "US policy should not support the repudiation of debt nor deprive a party of its ability to defend its interests while a dispute is before US courts."

The battle over Citgo is escalating as Guaido loses political support inside Venezuela, where Maduro has clung to power in spite of a severe economic hardship that his allies blame on US sanctions.

The main opposition coalition led by Guaido is lobbying for tighter sanctions by the US and the EU to pressure Maduro to step down.

The US imposed oil sanctions on Venezuela in late January, days after Guaido emerged as leader of the opposition movement that has since fragmented and lost momentum amid rising frustration. Guaido has called for a mass mobilization in Venezuela on 16 November, but it is not clear that he has enough support to muster a turnout on the scale that Venezuela witnessed in the weeks after he declared his authority.

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25/04/08

Keystone oil pipeline shut down after ND spill: Update

Adds latest pricing for US, Canadian sour crudes. Calgary, 8 April (Argus) — North American sour crude prices rose relative to their benchmarks today after the 622,000 b/d Keystone pipeline carrying Canadian crude was shut down following a spill in North Dakota. Canadian crude prices on either side of the spill diverged in Tuesday's trading, with Western Canadian Select (WCS) at Hardisty, Alberta, trading between a $9.15-11/bl discount to the CMA Nymex, with the midpoint representing a widening of about $1/bl day-over-day. WCS at the Texas Gulf coast was up by about 45¢/bl from its prior assessment, trading at a $2.60/bl discount to CMA Nymex. Fellow Canadian heavy sour Cold Lake meanwhile was up by a similar level, trading between $2.25-$2.65/bl discounts against CMA Nymex. The Keystone system is a major route for Canadian heavy crude destined for both the US midcontinent and the Gulf coast. Pipeline operator South Bow initiated a shutdown at 8:42am ET Tuesday after the leak occurred about 6 miles south of Kathryn, North Dakota, according to North Dakota environmental quality program manager Bill Suess. A pipeline employee working on a pump station along the route heard what he described as a "mechanical bang" prompting him to shut down the pipeline, which took about two minutes, Suess said. Crude was then seen surfacing in an agricultural field about 300 yards south of the pump station, where it was contained. Suess said there is no impact to a nearby stream. South Bow estimates about 3,500 bl was released. No restart timeline The company and government officials did not have an estimate for when the pipeline would restart. Next steps involve assessing the area for other utilities before excavating down to the 30-inch pipeline to make repairs. The US Pipeline and Hazardous Materials Safety Administration (PHMSA) said it has dispatched personnel to the scene to conduct a failure investigation. Today's upset is the latest of several incidents to disrupt the market since it was commissioned in 2010. The pipeline halted flows for more than three weeks in December 2022 after it spilled about 12,937 bl of oil in Washington County, Kansas. A crack in a flawed weld was determined to be the cause. Once fixed, PHMSA allowed the line to operate again, but at a reduced pressure. Only last month did PMHSA give South Bow the green light to increase pressure again . Other US prices affected Louisiana-delivered Mars and Thunder Horse widened their premiums over the Domestic Sweet (DSW) benchmark by over 30¢/bl, trading at 80¢-$1/bl premiums and $1.80-$1.90/bl premiums to the basis, respectively. Texas-delivered Southern Green Canyon (SGC) traded as strong as a 60¢/bl discount against the Cushing basis Tuesday morning, after trading at $1/bl discount for the prior two sessions. April DSW was exchanged for May in the Cushing physical spot market at premiums as high 60-70¢/bl, from roughly 45¢/bl on the final day of the April trade month on 25 March. In the futures market, May Nymex WTI has moved up to end the session at a 48¢/bl premium to June, rising from a 26¢/bl premium at settlement in the prior session. DSW is the assumed grade for delivery into the Nymex contract. It is blended to specifications in Cushing and is comprised of various crudes, including Canadian grades. The appreciating differentials came despite pressure from weak export demand from the US Gulf coast. By Brett Holmes, Mykah Briscoe and Amanda Smith Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US faults EU carbon fee during tariff fight

25/04/08

US faults EU carbon fee during tariff fight

Washington, 8 April (Argus) — President Donald Trump's administration is citing the EU's upcoming tariff on carbon-intensive imports as one of the "unfair trade practices" that justified a tariff response. Trump has said a 20pc tariff on most EU goods and a higher tariff on many other key trading partners — set to take effect after midnight — are "reciprocal" to other countries' tariffs and non-tariff barriers, even though those tariffs are calculated based on each country's trade deficits and imports with the US. Trump has yet to even identify which trade policies he wants other countries to change before he would withdraw tariffs his administration expects will raise $600bn/yr in new revenue. But the US Trade Representative's office, in a social media post on Monday made in "honor" of Trump's tariffs, identified the EU's Carbon Border Adjustment Mechanism (CBAM) — which will collect a carbon-based levy on imports such as steel, cement and fertilizer — as one of the examples of what it sees as an unfair trading practice. The Trump administration estimates $4.7bn/yr of US exports would be affected by the CBAM, which is set to take effect in 2026. "These EU regulations undermine fair competition, penalizing US companies while providing advantages to EU-based competitors," the US Trade Representative's office wrote in a series of posts on Tuesday that also criticized India and Thailand for imposing import restrictions on ethanol produced in the US. White House officials say more than 70 countries have approached the administration seeking deals on the tariffs since they were announced nearly a week ago. But with just hours before the tariffs take effect, Trump has yet to announce any definitive agreements to withdraw the tariffs. Instead, he has rejected offers from countries to zero out some of their tariffs. European Commission president Ursula von der Leyen on Monday said the EU was "ready to negotiate" on tariffs, and would zero out its tariffs on industrial imports if the US agreed to do the same. But Trump on Monday said that offer was not enough. "We have a deficit with the European Union of $350bn, and it's gonna disappear fast," Trump said. "One of the ways that that can disappear easily and quickly is they're gonna have to buy our energy from us." Today, Trump said he had a "great call" with South Korea's acting president Han Duck-soo that created the "probability of a great DEAL for both countries." Trump cited a potential agreement that might include large-scale purchases of US LNG and investments tied to the 20mn t/yr Alaska LNG export project. Trump and his cabinet believe the tariffs will align with a goal to achieve "energy dominance" and increase the amount of US energy exported abroad. "At the end of the day, we're going to have growing American exports and reindustrialize the country," US energy secretary Chris Wright said today during an interview on CNBC. Trump's tariffs have already caused a selloff in equities and, according to many analysts on Wall Street, a higher likelihood of a recession. Oil prices have dropped because of a "sudden change in the economic outlook, whereas everyone just honestly 10 days ago was expecting modest but steady positive growth in the US", non-profit group Center for Strategic and International Studies' senior fellow Clayton Seigle said today. Republicans have largely backed Trump in his imposition of tariffs, with the hope the tariffs will be lifted as part of trade negotiations. But some Republicans have started criticizing the rationale for the tariff policy. "Whose throat do I get to choke if this proves to be wrong?" US senator Thom Tillis (R-North Carolina) said in a hearing today with the US trade representative Jamieson Greer. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso weakens on US tariff fears

25/04/08

Mexican peso weakens on US tariff fears

Mexico City, 8 April (Argus) — The Mexican peso has weakened in recent days amid growing fears that US president Donald Trump's new wave of tariffs could derail the US economy and, in turn, slash Mexico's economic growth, financial analysts said. After Trump announced a series of new import tariffs on what he dubbed "Liberation Day" on 2 April, the peso initially reacted positively, as Mexico was largely spared from the measures, thanks to protections under the US-Mexico-Canada (USMCA) free trade agreement. The current tariff structure largely remains in place, which means zero tariffs on products under the USMCA agreement, except for steel, aluminum and finalized// assembled automobiles. Auto parts under USMCA still face zero tariffs. These exceptions, and other non-USMCA-compliant products, maintain 25pc tariffs on non-US content, analysts Barclays said. The peso appreciated more than 3.2pc to Ps19.97/$1 on 3 April from Ps20.4/$1 on 2 April, according to data from Mexico's central bank (Banxico). The exemptions could make Mexico more attractive in the medium- and long-term to manufacturers aiming to avoid US tariffs, Barclays said. Yet, investors are now concerned about the broader economic fallout of the escalating US-China trade conflict. "The Mexican peso is one of the most depreciated currencies [as of 7 April], because even though Mexico has not been hit with reciprocal tariffs and benefits from USMCA, the economic impact of tariffs on the US economy could significantly affect Mexico," said Gabriela Siller, chief economist at Mexican bank Banco Base. The peso weakened to Ps20.50/$1 on 4 April, from Ps19.97/$1 on 3 April, and continued weakening, closing at Ps20.69/$1 on 7 April, a 2.3pc depreciation over the last week. Year over year, the peso has tanked 21pc, affected by multiple reforms diminishing Mexico's business environment that passed in late 2024, Trump's electoral victory in November, and now by Trump's tariffs. Mexico's GDP is expected to grow by 0.2pc this year, according to a new Citi survey of 32 bank analysts, with nine forecasting zero or negative growth because of the potential fallout from US trade policy. On 1 April, Mexico's finance ministry lowered its 2025 GDP forecast to 1.5–2.3pc, down from 2–3pc. That's still more optimistic than the central bank and private analysts, who expect growth of only 0.7pc , citing uncertainty over US policy and tariff threats. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Kazakhstan continues to massively exceed Opec+ target

25/04/08

Kazakhstan continues to massively exceed Opec+ target

London, 8 April (Argus) — Kazakhstan does not expect any major reduction in crude output in April after massively exceeding its Opec+ target in March. Kazakhstan's crude production rose by 43,000 b/d to a record 1.79mn b/d in March, deputy energy minister Alibek Zhamauov said today, putting it 322,000 b/d above its Opec+ target of 1.468mn b/d. He added that Kazakhstan has not yet been able to agree with international oil companies operating the country's largest fields about reducing output. 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). Zhamauov said that there has not yet been any agreement on reducing Tengiz output as it "is a very challenging action, especially for Chevron [which] spent $50bn on the FGP project [and] told us it's not possible for them to reduce output". Tengiz production hit 901,000 b/d in March, Zhamauov said, compared to previous levels of 600,000-660,000 b/d. Kazakhstan's second-largest oil field, Kashagan, which is also operated by international firms, produced 387,000 b/d in March, he said. Neither are expected to reduce output in April, he added. Zhamauov said that Kazakhstan will try to reduce output from smaller fields operated by domestic producers such as state-controlled Kazmunaigaz. But any decrease from these fields will not be enough to offset the rise from Tengiz. Kazakhstan remains one of the Opec+ alliance's largest overproducers, despite repeatedly pledging to compensate for exceeding its target since January 2024. This has frustrated other Opec+ members, which have largely stuck to their production targets. Kazakhstan's compensation plan states its March production should have been 1.43mn b/d. Kazakhstan's continued overproduction is understood to have contributed towards the decision by Opec+ members to start increasing output from April . Zhamauov said that Kazakhstan's crude production and exports have not been impacted by the closure of two single-point moorings (SPMs) at the Caspian Pipeline Consortium (CPC) terminal on Russia's Black Sea coast late last month. Kazakhstan's crude exports were 1.41mn b/d in March, up from 1.39mn b/d in February, while refinery runs were 370,000 b/d, up by 22,000 b/d, Zhamauov said. Condensate production was 290,000 b/d, compared to 278,000 b/d in February. This brings Kazakhstan's total liquids production in March to 2.08mn b/d. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US tariffs set to rise despite Trump talk of deals

25/04/08

US tariffs set to rise despite Trump talk of deals

Washington, 8 April (Argus) — Punitive taxes on imports from key US trading partners are set to rise on Wednesday despite President Donald Trump's claims of multiple trade deals in the making. Trump's 10pc baseline tariff on imports nearly every foreign country already went into effect on 5 April. The higher, "reciprocal" taxes will go into effect as scheduled, at 12:01am ET on 9 April, US trade representative Jamieson Greer told the Senate Finance Committee today. Trump, via his social media platform, said today he discussed a possible trade deal with South Korea and added that "we are likewise dealing with many other countries, all of whom want to make a deal with the United States." Greer told the Senate panel that more than 50 countries have reached out to the US to negotiate trade deals. Treasury secretary Scott Bessent separately claimed that more than 70 countries are interested in a trade deal with the US. Both Democratic and Republican senators on the Senate panel pressed Greer to explain whether negotiations would result in lowering tariff rates. But Greer outlined a process that he expects would lower foreign countries' tariff rates on US products and commit them to buy more US energy and other products. "There are things we can do with our trading partners, things that aren't always purely in the trade sector," Greer said. Possible subjects for trade negotiations could involve "export controls alignment or investment screening, alignment on energy, making sure that our partners are tied up with us with respect to LNG and other resources, as opposed to being dependent on other countries." The US is primarily looking to reduce trade deficits with those countries, Greer said. "What we have told them is, 'if you have a better idea to achieve reciprocity and to get our trade deficit down, we want to talk to you.'" Trump, in turn, suggested that a possible deal with South Korea could include "large scale purchase of US LNG" and "their joint venture in an Alaska Pipeline". The latter is a reference to the planned 20mn t/yr Alaska LNG project, which would be the most expensive liquefaction facilities ever built in the US if it becomes a reality. Trump has talked up potential support for Alaska LNG from Japan, South Korea and Taiwan for months. But the three countries still became subject to high tariffs. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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