Rosneft chief rebukes Venezuelan leader over oil shipments
The head of Russian oil company Rosneft, Igor Sechin, flew to Caracas this week to meet Venezuelan President Nicolas Maduro and complain over delayed oil shipments designed to repay loans, two sources briefed on the conversation said on Saturday.
The visit, which was not publicly disclosed, is one of the clearest signs of strain between crisisstricken Venezuela and its key financier Russia.
Over the last few years, Moscow has become Venezuela’s lender of last resort, with the Russian government and Rosneft handing Venezuela at least $17 billion in loans and credit lines since 2006, according to Reuters calculations.
State oil company PDVSA is repaying almost all of those debts with oil, but a meltdown in its oil industry has left it struggling to fulfill obligations.
Sechin and a large delegation of executives met with officials at PDVSA in a Caracas hotel this week. Sechin also met with Maduro and chided him over oil-for-loans shipments that are behind schedule.
“He brought information showing that they were meeting obligations with China but not with them,” said one source with knowledge of the talks. “They’re running around in PDVSA because of this.”
Venezuela’s oil production has fallen to just 1.17 million barrels per day ( bpd), a 37 percent drop in the last year, according to reports from secondary sources to OPEC. This has left the country struggling to ship Russian entities the roughly 380,000 bpd it has agreed to send, according to PDVSA documents seen by Reuters.
The closing of a dock at Venezuela’s main oil export port, through which the vast majority of shipments to Rosneft transit, has delayed millions of barrels in crude since
August.
Sechin handed Maduro graphics about oil shipments to Russian entities compared with China, the two sources said.
Top financier China, which has plowed more than $50 billion into Venezuela, is also reimbursed in oil.
According to Reuters calculations based on PDVSA data, the Caracasbased company delivered around 463,500 bpd to Chinese firms between January and
August, a roughly 60 percent compliance rate. That compares with around 176,680 bpd to Russian entities, or a 40 percent compliance rate.
Rosneft and PDVSA did not immediately respond to a request for comment. One of the sources with knowledge of Sechin’s visit, as well as two separate sources, said a Chinese delegation was also in Caracas this week.
As of early 2017, PDVSA began to fall months behind on shipments of crude and fuel under the loan deals with China and Russia due to problems in its oil industry, home to the world’s biggest crude reserves, according to documents reviewed by Reuters.
The problems include operational mishaps, such as refining outages and delayed cleaning of tanker hulls, and financial disputes with service providers owed money by PDVSA.
In April, Rosneft and PDVSA signed a refinancing agreement designed to allow the Venezuelan company to catch up on delayed loan payments by delivering more crude to Rosneft. Under the refinancing, PDVSA has to provide Rosneft with some 380,000 bpd, up from around 310,000 bpd, according to Reuters calculations.
Rosneft was planning to use Jose’s South dock to pick up the cargoes, before an August tanker collision delayed exports. PDVSA reopened the dock earlier this month, sources said.