HOUSTON/CARACAS- OPEC member, Venezuela raised the prospect of declaring forces majeure on contracts crude buyers amid plummeting output from its oil fields and tanker bottlenecks at ports, according to three sources familiar with the matter.

Oil is the financial lifeline for the socialist government, President Nicolas Maduro, but his cash-strapped administration has failed to invest in the industry to prevent the breakdown.

Venezuela’s state-owned oil firm, PDVSA told to some customers that they must have to send vessels equipped to accept ship-to-ship oil transfers than to load at its ports. If customers do not accept the terms, the company is considering force majeure, with essence declaring all its contracts incapable of being fulfilled.

The separate notification is being provided by the company to all its customers that company will no longer receive any new tankers for loading at Jose or Paraguana, its main export terminals until then ships already in line.

TANKER CONGESTION

PDVSA has been using sanctions imposed on the company by U.S. President Donald Trump as a rationale for the change, according to one of the sources.

Customers have refused the ship-to-ship transfer request due to the lack of a third party supervising the operations so far. According to traders, Additional costs for completing the transfer are also contributed to the refusals.

More than 70 tankers off the coast of Venezuela on Tuesday, according to Thomson Reuter’s vessel tracking data.

The source familiar with the matter said. “We are going to try the ship-to-ship idea first”. It also added referring to fees charged for long waiting times, “Many customers are going to prefer this than continuing to accumulate demurrage”.

 

Related Articles
Next Story
Going Viral
UK Prime Minister Boris Johnson Urges For Early Election On December 12

UK Prime Minister Boris Johnson Urges For Early Election On December 12

by Chandrani Sarkar October 25, 2019
On Thursday, British Prime Minister Boris Johnson has said that he would offer more time to the Parliament to evaluate his Brexit Deal, if it agrees to hold an early election on December 12. The Conservative Premier has suspended debates on his European Union divorce deal after the Parliament on October 22 has declined to fast-track the hearings ahead of the October 31 deadline for Brexit Deal. However, PM Johnson...