Officials with Venezuela’s state-owned Petroleos de Venezuela (PDVSA) have talked with private contractors about paying them with fuel and byproducts for repair at the country’s refineries, Reuters reported, citing six people familiar with the discussions. This came as the company struggled to pay third-party contractors amid US sanctions and severe cash-flow problems.
PDVSA’s cash has dried up amid falling oil production and prices, and it cannot pay contractors through bank transfers due to US sanctions. Venezuela pumped 421,000 bpd of crude in the first half of June, down from 573,000 bpd in May, according to its report to OPEC.
PDSA has reportedly restarted the catalytic cracker unit at the 310,000 bpd Cardon refinery. It also resumed gasoline production at the 146,000 bpd El Palito refinery. The private contractors are helping PDVSA to revive its crippled 1.3 million bpd refinery network. The halt has caused severe fuel outages in the oil-rich country.
Receiving fuel and byproduct as payment allows these companies to export the products themselves. However, it remains unclear whether it can trigger sanctions from Washington.
