According to company documents seen by Reuters, Venezuelan state-owned energy company Petróleos de Venezuela, S.A. (PDVSA) has started to offer the shipments of its own oil to buyers to alleviate the effect of US sanctions to the country’s oil sector.
Since at least April, PDVSA has adjusted the long-term and new agreements to sell oil with it being responsible for transportation costs and occasionally customs fees. In comparison, customers had to send vessels to Venezuelan ports to load the crude.
At the moment, buyers would be the party setting the port for delivery and PDVSA is responsible for transferring the oil there.
However, the strategy faces risks to fail if PDVSA is failed to gather sufficient ships as, according to company and shipping sources, among more than two dozen of PDVSA’s vessels, only four have valid classification and insurance.
Some of the company’s vessels no longer have operators as the company failed to pay the management company and crews of the vessels. In 2019, Germany’s Bernhard Schulte Shipmanagement returned more than a dozen ships as PDVSA’s failed to pay the management cost.
Other ships need maintenance, which PDVSA is struggling with as it cannot get the required parts or afford to pay for the work.
Other than that, some of PDVSA’s vessels are facing risks of being retained by foreign creditors. For example, four very large crude carriers (VLCCs) it owns along with PetroChina could be lost if Singapore’s high court rules the tankers can be seized or auctioned to pay creditors.
PDVSA also has begun to utilize tankers initially leased for domestic oil shipping for international voyages.
However, the first shipment of the adjusted sale has said to be facing uncertainty. The Panama-flagged tanker MT Kelly, which left Venezuela for Turkey carrying 1.96 million barrels of heavy crude in April, was said to u-turned near Turkey, sailed back out of the Strait of Gibraltar to skirt around Africa en route to the Middle East.
According to Refinitiv Eikon vessel data, the ship’s satellite transponder has been off since June 22 and there is no clarity if the ship has delivered the cargo.
The sanctions have driven around 20 million barrels of Venezuelan crude stranded at sea as PDVSA struggles to find buyers.
