Venezuela sanctions spotlight
Overview
US sanctions on Venezuela’s national oil company PdV, first imposed on 28 January 2019, cast another layer of geopolitical uncertainty onto the international oil market. The sanctions take effect in stages, gradually intensifying their impact on the Opec country’s imports and exports.
For international oil companies, traders and governments around the world, the sanctions rollout and partial unwinding of commercial ties will help to shape near-term market dynamics, with longer-term implications for energy policy and investment.
Follow along with Argus as we deliver the latest news and market analysis on this fast-developing story.
Timeline: Key Venezuela sanctions dates
Related news and analysis
US attorneys cast light on Venezuela oil trade
US attorneys cast light on Venezuela oil trade
Washington, 5 November (Argus) — The next US president will have to decide how to continue to apply economic penalties against oil-producing countries such as Russia, Iran and Venezuela — but the sanctions regime is hardly a barrier for some determined sellers and buyers. A US federal indictment, unveiled on Monday, accused Turkish national Taskin Torlak of trading Venezuelan oil in 2020-23 despite US sanctions against Caracas. Torlak allegedly relied on individuals and companies operating in Ukraine, China, Turkey, Russia and other countries to access US banks, insurers and freight companies to transport Venezuelan oil to China. US sanctions cut off Venezuela from the US financial system under the threat of economic and criminal penalties. Torlak's methods included re-naming and re-flagging oil tankers, covering tanker names with paint or blankets, and turning off the AIS transponders and obtaining fake bills of lading, according to the US criminal indictment. Venezuela state-owned PdV allegedly paid tens of millions of dollars to Torlak to facilitate shipment of oil. But the US indictment also cites frequent complaints from Torlak about PdV's arrears for such services. "We would like to emphasize our satisfaction in operating our fleet under the commercial interest serving the Bolivarian Republic of Venezuela and [PdV] for nearly 2.5 years, with strong technical management and continuous validation from charterers", an associate of Torlak wrote to PdV in July 2023 to complain that the Venezuelan company was late in making a $32.5mn payment. President Joe Biden's administration lifted sanctions against PdV in October 2023, only to reimpose them six months later as Caracas reneged on its promise to hold a free and fair presidential election. The US backs the Venezuelan opposition's claim that its candidate Edmundo Gonzalez defeated incumbent president Nicolas Maduro in July. But Washington has backed away from adding more sanctions against Venezuela. Most Venezuelan crude heads to China, where many independent refiners rely on networks such as Torlak's alleged organization to access discounted crude from countries under US sanctions. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Ex-PdV head quits Venezuela ministry, Saab in
Ex-PdV head quits Venezuela ministry, Saab in
Caracas, 18 October (Argus) — Venezuela's former head of state-owned PdV and oil minister Pedro Tellechea resigned from his recent post as industries minister, with former US prisoner Alex Saab taking his place. Tellechea stepped down from his two roles in late August to be replaced by Venezuelan vice president Delcy Rodriguez as part of a broader cabinet reshuffle after a contested 28 July presidential election. He announced his departure today on X, formerly Twitter, a social media platform recently banned in Venezuela but accessible through virtual private networks. He attribute his leaving to health problems. Saab, appointed almost immediately after Tellechea said he was leaving, is a Colombian-Venezuelan businessman freed last year by the US administration in a prisoner swap. He spent three years in US and African jails awaiting trial on money-laundering charges. Several of Tellechea's colleagues in top military and law enforcement posts were sacked by Venezuela President Nicolas Maduro this week also, including the head of the presidential security detail Ivan Hernandez, sources told Argus . Tellechea is a former colonel in the Venezuelan army and an engineer. He took over at PdV in January 2023, in the wake of an investigation into an alleged $23bn in missing cryptocurrency funds, and became energy minister two months later. His predecessor in that role, Tareck El Aissami, was jailed in the cryptocurrency case. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
PE firm Elliott bids $7.3bn for Citgo assets: Update
PE firm Elliott bids $7.3bn for Citgo assets: Update
Adds reaction from Amber, details throughout. Houston, 27 September (Argus) — An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn. The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation for the court to choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November. Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV. If the sale to Amber moves forward following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018. "Amber Energy's strategy for growth includes plans to reinvest in the business and potentially pursue strategic investments that enhance the profitability of Citgo," the company said. Citgo was not immediately available for comment. Amber is lead by chief executive Gregory Goff, who was previously chairman, president, and chief executive officer of Andeavor. Company president Jeff Stevens is currently president of Franklin Mountain Energy, which is focused on the Permian basin. He has also been an executive officer of independent refiner and marketer Western Refining. The company plans to keep the Citgo brand, and expects the deal to close by mid-2025. Conditions of the deal include the buyer applying for and acquiring a license from the US Treasury's Office of Foreign Assets Control, because the ultimate owner of Citgo is Venezuelan state-owned PdV, which is subject to US sanctions. "We look forward to partnering with the people of Citgo to ensure that the company continues to operate with the highest standards of safety and reliability," Amber said. Even though it is owned by PdV, Citgo since 2019 has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. PdV remains under control of President Nicolas Maduro's government. Maduro has rejected the US court proceedings on selling Citgo as "theft" and the issue is likely to feature in his protracted battle with the US-backed opposition, which claims to have defeated Maduro in the July presidential election. The court earlier this year approved a ranking order in which debtors will be paid out of proceeds, rather than allocating them on a pro rata basis. The first in line is defunct Canadian mining firm Crystallex, now owned by New York hedge fund Tenor Capital, with a $990mn claim. ConocoPhillips has a total of three claims approved by court, but only two of those are likely to be satisfied, potentially netting $1.4bn. The next largest is a $1.5bn claim by Russian-Canadian gold miner Rusoro, while energy company Koch's minerals arm is chasing a $457mn claim. Separate US court proceedings involve holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in Citgo Holding — a PdVH-owned legal entity that directly owns Citgo. In theory, the bondholders have the right to be paid first before other claimants are satisfied. The US government has blocked the bondholders' ability to pursue the claim, most recently issuing a ban that is valid until mid-October. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Elliott bids $7.3bn for Citgo assets
Elliott bids $7.3bn for Citgo assets
Houston, 27 September (Argus) — An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn. The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation the court choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final a hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November. Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV. If the sale to Amber moves forward, following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018. Since 2019 Citgo has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. But its ultimate parent company, state-owned PdV, remains under control of the Maduro government. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Map: Primary Venezuelan oil assets
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