One of the biggest questions surrounding Venezuela centers on its now-moribund oil sector, which has suffered from decades of neglect. It’s widely understood that a recovery will take time, but there are some concrete steps that could boost production in the short, medium and long term.
The news out of Venezuela has commanded the world’s attention since early January, with the country’s highly prized heavy crude oil caught in a geopolitical tug of war. In today’s RBN blog, we’ll lay out where Venezuela’s crude oil is produced and how it differs from grades elsewhere.
Venezuela took center stage last weekend when President Trump removed and arrested President Nicolás Maduro, putting a spotlight on the country’s oil resources and production. Today we take a deep dive into how we think the upheaval could reshape crude oil flows, price differentials, refining slates and export economics.
Exports of Venezuelan crude to the U.S. have moved lower in recent months, a trend that seems likely to continue with the May 27 expiration of Chevron’s permit to operate there. But while a limited extension of that permit appears likely, if not yet official, the development adds new challenges for Gulf Coast refiners that process heavy crude. In today’s RBN blog, we’ll update the situation in Venezuela, assess what it means for Chevron, and discuss the outlook for the heavy crude-capable Gulf Coast refiners.
The Trump administration announced on February 26 that it is ending Chevron’s permit to operate in oil-rich Venezuela, which will halt U.S. imports of Venezuelan crude by early April. These changes, combined with other recent developments, are likely to significantly impact complex U.S. Gulf Coast refiners relying on heavy crude. In today’s RBN blog, we’ll discuss these impacts — an issue our Refined Fuels Analytics (RFA) practice examined in its recently updated Future of Fuels report.
On Thursday, August 9, a U.S. District Court judge approved a request by a Canadian mining company to seize shares of a subsidiary of Petróleos de Venezuela SA (PDVSA) that controls CITGO Petroleum Corp. The ruling was made to satisfy a $1.2 billion arbitration award against the Venezuelan government. While details of the full ruling are yet to be released, this decision could have an enormous knock-on effect on the various other parties seeking payment from the struggling oil company for asset seizures and unpaid debts. Today, we review the assets of CITGO Petroleum Corp., the U.S. arm of PDVSA.
The Caribbean is strategically located at the crossroads of international trade routes between the Northern and Southern hemispheres, as well as the Atlantic and Pacific oceans. It has traditionally attracted oil trading, blending, and refining activity to meet the needs of local and international markets. Lately, the meltdown of Venezuelan national oil company Petróleos de Venezuela SA (PDVSA) — previously a dominant player in the region — has left refineries and storage terminals underutilized and starved of investment. U.S. Gulf Coast refineries have partially filled the gap by increasing product exports to the region, but an opportunity now exists for private investment to fill the refining and storage void left by PDVSA, and also to meet new demand for low-sulfur bunker fuel arising from stricter International Maritime Organization shipping regulations, which will come into effect in January 2020. Today, we review the impact of the PDVSA meltdown and new investment projects being pursued.
Refineries located close to booming Eagle Ford shale production have nameplate capacity to process over 900 Mb/d of crude but can only consume 375 Mb/d of local output today. That is because the larger refineries in Corpus Christi were built to process heavy sour crude oil instead of ultra light Eagle Ford. New additions will expand light crude capacity by 100 Mb/d in 2015 (in addition to planned condensate splitters). Today we detail Devon and Genesis pipeline projects as well as regional refining capacity.
In mid-September 2014 the joint venture partners in the shuttered St. Croix (U.S. Virgin Islands) HOVENSA refinery announced an agreement in principal to sell to a private equity fund. The refinery – shut since January 2012 - has been for sale since then but after losing $1.3 Billion in its last 3 years of operation has had trouble finding a buyer. Today we look at the hurdles a new owner has to overcome.
Last week RBN co-hosted the “Surviving the Flood” conference with Turner, Mason & Company in Houston. The major theme of the conference was the expected timing and likely impact of a “Day of Reckoning” for the US oil market that could come any time between 2015 and 2020 depending on critical factors influencing market dynamics. If and when the big day arrives, and if export rules don’t change and refinery hardware is not upgraded, Gulf Coast light Louisiana sweet (LLS) crude could be trading at a discount of $15-$20/Bbl to international light sweet benchmark Brent. Today we discuss the day of reckoning and its critical influencers.
