7,933 Active Recruiters     Over 2 Million Candidates Globally

Advanced
  1. Keep me logged in
  2. forgot password
cancel

Checkout Jobs Basket (0)

You can checkout a maximum of 150 jobs.

Signup Better for Candidates

  • Create a free virtual CV and let recruiters find you
  • Automatically have your profile matched to suitable Oil & Gas positions
  • Link to your profile using it as a free online CV
  • Store all your employment documents to your profile for easy sending
  • Always receive feedback on positions applied for

Signup Better for Recruiters

  • Advertise Oil and Gas jobs for free
  • Suitable candidates automatically matched to your position
  • View candidate profiles for free
  • No more waiting for candidates to respond to job advertisements
  • Only ever pay when you match a candidate to a position
  • No more cold calling and sorting through out dated CVs

PBF's Split with PDVSA Grows as U.S. Refiner Halts Direct Deals

Published in Oil Industry News on Thursday, 12 October 2017


Graphic for News Item: PBF's Split with PDVSA Grows as U.S. Refiner Halts Direct Deals

The fifth largest U.S. buyer of Venezuelan crude, PBF Energy Inc, has halted direct purchases from state-run oil company PDVSA, according to four sources, deepening a rift amid sanctions on the OPEC-member country.

PBF is the second buyer in as many months to go elsewhere for its oil and further disagreements could spell new hardships for PDVSA, which owes bondholders $1.2 billion in debt payments due this month. Venezuela relies on oil for over 90 percent of export revenue and U.S. refiners are among its largest cash-paying customers.

In August, the Trump administration imposed sanctions on Venezuela, in part barring new financial arrangements with PDVSA. Those restrictions have banks refusing to issue letters of credit needed to assure some oil sales.

PBF notified PDVSA last month it “is not going to take any more Venezuelan crude cargoes” from the state-run firm, said a PDVSA source who could not be identified because the information was not public.

That notification came after a more than 40-day standoff over a previous shipment. In July, a Venezuelan heavy oil cargo intended for PBF sat off Louisiana awaiting a letter of credit to complete the sale. The tanker discharged in August.

Neither company would say whether the agreement is terminated. The Parsippany, New Jersey-based refiner declined to comment on “business confidential information.” PDVSA did not respond to a request for comment.

PBF has not directly purchased oil from PDVSA since early September, according to Thomson Reuters trade flows data. But the refiner has bought Venezuelan crude from intermediaries in recent months, the data say.

Intermediaries currently working with Venezuela are traders and oil firms who purchase crude from PDVSA and assume the risk of any default in a transfer.

PBF also has increased imports of heavy oil from other nations, including Colombia.

The tanker Gold Sun arrived in Venezuela’s Jose port this week to load crude for PBF. Reuters trade flow data has not yet disclosed further details about the shipment.

PBF typically buys at least two 500,000-barrel cargoes per month from PDVSA, and through September was the fifth U.S. largest importer of Venezuelan oil, receiving almost 52,000 barrels per day (bpd) from different suppliers, according to the Reuters data.

A STRUGGLE TO KEEP CUSTOMERS

In September, PDVSA also lost a supply contract for naphtha and natural gasoline to Brazilian petrochemical firm Braskem SA .

Falling output and oil-quality issues have contributed to PDVSA’s struggles to retain customers, and the situation worsened once its name appeared in a U.S. sanctions list.

The sanctions imposed in August do not stop U.S. entities from continuing trade relationships with PDVSA, but they ban new long-term financing for the company, its subsidiaries and the Venezuelan government. They also require business partners to notify the Department of Treasury about certain transactions.

The heightened level of scrutiny has not been welcome by U.S. refiners, according to the trading sources.

Venezuela in September sent less than 500,000 bpd of crude to the United States, its main destination for oil exports. The volume marked a 38 percent decline compared with the same month in 2016, according to the Reuters data.

The South American country has been looking for new buyers for its barrels since sanctions began, according to officials including President Nicolas Maduro. It recently started posting its crude prices in Chinese yuan, aiming to build a “currencies basket” to untangle banking operations and move off U.S. dollar-based sales.

BETTER WITHOUT YOU

As PDVSA tries to expand its portfolio of customers, PBF and other U.S. refiners are looking elsewhere, too. Separate from its 33,000-bpd contract with PDVSA, PBF has started buying Venezuelan crude from trading firms, while negotiating with PDVSA over other forms of payment, according to the data and sources.

Eulogio Del Pino, Venezuela’s oil minister, said on state television in August that PBF “are the ones who have to pay ahead of time if they want us to load.”

PDVSA’s insistence that PBF prepay for cargoes hamstrung negotiations, the PDVSA source and one of the traders said, while the refiner suggested an open credit mechanism that would allow it to pay at least 30 days after delivery.

“There’s no reason for PDVSA to start demanding prepayments other than retaliation for the sanctions and lack of cash, but those problems should not be transferred to the buyers,” one trader said.

PBF has sought alternatives to Venezuela’s heavy crude oil to meet its refineries’ feedstock requirements. In September, it bought from Royal Dutch Shell a cargo of Colombia’s PB19 crude, a grade that is rarely sold on the export market, according to the Reuters data.

Disruptions in imports from Venezuela also have affected Phillips 66, the firm said in August. PDVSA’s supply to the U.S. refiner’s Sweeny facility in Texas has dropped by more than two thirds this year in part due to oil quality issues forcing the firm to cancel cargoes and request price discounts.

Phillips 66 has increased purchases of other Latin American heavy crudes for Sweeny in recent months, including Colombian, Mexican and Ecuadorian grades, according to Reuters data.

Source: www.reuters.com

Please leave comments and feedback below





Tags

Venezuelan Oil and Gas, PDVAS Oil and Gas, Oil and Gas Corruption, Oil and Gas New








Oil and Gas News Archive


Latest Oil & Gas News







Featured Companies

  • View All JobsChronos Oil and Gas

    Chronos Oil and Gas is one of the fastest growing and best placed recruitment agencies in the sector.

    With over 300,000 candidates on our database and an international team of specialist recruiters we work with clients to staff major projects around the world.

    Register your CV at www.chronosoilandgas.com.

  • View All JobsOrion Group

    Orion Group are one of the world's leading engineering recruitment agencies specialising in contract and permanent manpower for the majority of the world's largest energy specialists.

    The group have 45 offices located internationally from Calgary and Houston to offices in the Middle East and Asia Pacific.

    Visit Orion Group at www.orionjobs.com.

  • View All JobsNatural Resources

    Natural Resources is a UK based recruitment company providing personnel of all disciplines and nationalities worldwide.

    We represent clients and candidates at all levels who operate globally within oil & gas, renewables, nuclear, power, mining, marine, drilling, construction and petrochemicals. Our client base includes energy and construction.

    Visit Natural Resources at natural-resources.com.