VENEZUELA has sustained exports of refined products to neighbouring Guyana in recent months, in spite of a flare-up in a longstanding dispute over oil-prone territory on the border.The current exports of around 4,500 b/d to Guyana are part of a total estimated 160,000 b/d that Venezuelan State-owned PdV delivered from 1 January to 31 May 2015 to 15 members of PetroCaribe, including close ally, Cuba.
Under PetroCaribe, PdV supplies the neighbouring countries with crude and refined products on soft terms, with some of the oil repaid in non-oil products.
Guyana pays for part of its supply with rice and sugar, which are among the many food staples that are in short supply in economically struggling Venezuela.
Venezuela´s reliance on the food imports, and reluctance to risk alienating other PetroCaribe member countries that it depends upon for regional political support, explains why Caracas maintains oil supply to Guyana.
The Venezuelan Government opposes current oil exploration off Guyana, because it claims much of the territory, known as the Essequibo, as its own, a claim Guyana rejects.
ExxonMobil said last month it made a “significant” oil discovery on the Stabroek block off Guyana with its two partners, US independent Hess and China´s State-owned CNOOC unit, Nexen.
Even though PdV has not cut off Guyana´s supply, PdV’s overall PetroCaribe exports slipped by 1.6pc in January-May, compared with the average at the end of 2014.
PdV shipped almost 90,000 b/d to Cuba in January-May, unchanged from 89,400 b/d exported to the island in 2014. But PdV’s exports to Cuba currently are about 21,723 b/d or almost 20pc below a peak of 111,723 b/d reported in 2008.
PdV’s oil exports to Cuba are repaid mostly with services provided by up to 50,000 Cuban nationals deployed in Venezuela on economic, social and security missions.
PdV’s combined oil exports to 14 other PetroCaribe members during the first five months of 2015 averaged about 70,000 b/d, a decline of over 4.3pc from 2014, according to the ministry’s year-to-date estimates.
PdV’s exports through PetroCaribe are falling, because the initiative’s financing terms become less attractive for buyers as the oil price declines.
PetroCaribe members can finance up to 50pc of the oil received from PdV for up to 25 years at 1pc annual interest when the oil price surpasses $80/bl. Below that price, the portion that can be financed, and the maturity of the credit shrink. This prompts some buyers to shop around for alternative sources of supply.
PdV is not cutting back PetroCaribe oil exports because of any upstream operational difficulties or cash flow problems, the ministry said.
PetroCaribe members that received oil from PdV during the first five months of 2015 included Antigua, Belize, Dominica, Dominican Republic, El Salvador, Grenada, Guyana, Haiti, Jamaica, Nicaragua, St Kitts and Nevis, St Vincent and the Grenadines, and Suriname.
Guatemala and Honduras belong to PetroCaribe, but do not buy oil from PdV because of disagreements with Caracas over financing terms. (Argusmedia.com)