Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Exclusive: Venezuela shifts oil ventures' accounts to Russian bank - document, sources

Published 02/10/2019, 10:19 AM
© Reuters. FILE PHOTO: Cutouts depicting images of oil operations are seen outside a building of Venezuela's state oil company PDVSA in Caracas
CVX
-
TTEF
-
HAL
-
GE
-
SLB
-

By Corina Pons and Marianna Parraga

CARACAS (Reuters) - Venezuela's state-run oil company PDVSA is telling customers of its joint ventures to deposit oil sales proceeds in an account recently opened at Russia's Gazprombank AO, according to sources and an internal document seen by Reuters on Saturday.

PDVSA's move comes after the United States imposed tough, new financial sanctions on Jan. 28 aimed at blocking Venezuela's President Nicolas Maduro's access to the country's oil revenue.

Supporters of Venezuelan opposition leader and self-proclaimed interim president Juan Guaido said recently that a fund would be established to accept proceeds from sales of Venezuelan oil.

The United States and dozens of other countries have recognized Guaido as the nation's legitimate head of state. Maduro has denounced Guaido as a U.S. puppet seeking to foment a coup.

PDVSA also has begun pressing its foreign partners holding stakes in joint ventures in its key Orinoco Belt producing area to formally decide whether they will continue with the projects, according to two sources with knowledge of the talks.

The joint venture partners include Norway's Equinor ASA, U.S.-based Chevron Corp (NYSE:CVX) and France's Total SA (PA:TOTF).

"We would like to make formal your knowledge of new banking instructions to make payments in U.S. dollars or euros," wrote PDVSA's finance vice president, Fernando De Quintal, in a letter dated Feb. 8 to the PDVSA unit that supervises its joint ventures.

Even after a first round of financial sanctions in 2017, PDVSA's joint ventures managed to maintain bank accounts in the United States and Europe to receive proceeds from oil sales. They also used correspondent banks in the United States and Europe to shift money to PDVSA's accounts in China.

State-run PDVSA several weeks ago informed customers of the new banking instructions and has begun moving the accounts of its joint ventures, which can export crude separately. The decision was made amid tension with some of its partners, which have withdrawn staff from Caracas since U.S. sanctions were imposed in January.

The sanctions gave U.S. oil companies working in Venezuela, including Chevron and oil service firms Halliburton (NYSE:HAL) Co, General Electric (NYSE:GE) Co's Baker Hughes and Schlumberger NV (NYSE:SLB), a deadline to halt all operations in the South American country.

The European Union has encouraged member countries to recognize a new temporary government led by Guaido until new elections can be held. Europe also has said it could impose financial sanctions to bar Maduro from having access to oil revenue coming from the region.

Maduro has overseen an economic collapse in the oil-rich OPEC country that has left many Venezuelans malnourished and struggling to find medicine, sparking the exodus of an estimated 3 million Venezuelans.

Sanctions designed to deprive Maduro of oil revenue have left an armada of loaded oil tankers off Venezuela's coasts that have not been discharged by PDVSA's customers due to payment issues. The bottleneck has caused problems for PDVSA to continue producing and refining oil without imported diluents and components.

© Reuters. FILE PHOTO: Cutouts depicting images of oil operations are seen outside a building of Venezuela's state oil company PDVSA in Caracas

PDVSA also ordered its Petrocedeno joint venture with Equinor and Total to halt extra-heavy oil output and upgrading due to a lack of naphtha needed to make the production exportable, as the sanctions prohibit U.S. suppliers of the fuel from exporting to Venezuela.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.