Venezuela: oil tips
By Aleksander Boyd
• PDVSA is shipping oil to China (Cerro Negro).
• PDVSA is allegedly selling to China at a price equal to crude deliveries to US refineries based on WTI minus premium.
• PDVSA's agreements with Petrochina predate Chavez.
• Petrochina refineries in north China, are set to refine light crude (Venezuelan crude is heavy).
• Chinese heavy crude refineries, owned / operated by SINOPEC, are located in the south.
• PDVSA sales to Petrochina are believed to be displacing regional crude producers (Gulf States). The profitability of said crude sales (PDVSA to Petrochina) remains to be established owing to the additional premium that PDVSA would have to cover when factoring transport. This begs for the question; why would Petrochina buy Venezuelan crude if not because it has been offered at a discount compared to regional producers?
• The Chavez premium, in Asia, manifests itself in the form of biting into market share heretofore dominated by the Arabs.
• The Arabs are angling to ever augment sales to the USA.
• PDVSA permanent loss of production capacity coupled with Chavez policy to deviate shipments to China, merely for political reasons, is playing into the Arab hands.
• The German Marxist energy ideologue Bernard Mommer is believed to be responsible for the said shift in PDVSA selling policy. Mommer can be pointed as the master mind behind the crippling of Orimulsion production by Bitumenes del Orinoco (BITOR); additionaly the selling of CITGO could be in the works. Awkwardly enough he has recently been appointed by Chavez, amongst other things, as BITOR's CEO and Director of CVP International (Venezuela's International Petroleum Corporation). Moreover, gossip has it that Mommer could be working for the Arabs, hell bent in achieving the complete destruction of the operative and international commercialization capacity of PDVSA.
• An American company has closed a 1 year/50.000BPD contract for the purchase of Venezuelan crude with non-PDVSA traders (Free Trade Petroleum revisited). Again, adding links to the trading chain can seldom maximize profits for PDVSA.
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