Venezuela’s PDVSA mulling force majeure on oil exports: sources

HOUSTON (Reuters) – Venezuela’s state-owned oil company PDVSA is considering a declaration of force majeure if customers do not accept ship-to-ship transfers or if tanker congestion worsens at its two main export facilities, three sources familiar with the matter said on Tuesday.

FILE PHOTO: A man walks past a gas station with the logos of the Venezuelan state oil company PDVSA in Caracas, Venezuela December 23, 2016. REUTERS/Carlos Garcia Rawlins/File Photo

PDVSA’s largest buyers were being asked to accept new terms or face force majeure, the sources said.

PDVSA did not reply to a request for comment.

Argus, a provider of energy pricing information and news, first reported the possibility of PDVSA invoking the declaration.

The cash-strapped company pulled back from several Caribbean islands where it prepares cargoes for export after ConocoPhillips seized assets to enforce a $2 billion arbitration award in a dispute over the socialist government’s nationalization of the U.S. oil producer’s Venezuela assets.

PDVSA’s declining crude production, lack of spare parts and materials to run its refineries and difficulty importing critical light crude and naphtha to blend with its heavy crudes are progressively reducing the amount of oil available for export.

Venezuela has been wracked by political turmoil and a severe recession and hyperinflation.

Reporting by Marianna Parraga in Houston and Rishika Chatterjee in Bengaluru; Editing by Peter Cooney, Toni Reinhold

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Venezuela’s PDVSA mulling force majeure on oil exports: sources