Venezuela sourcing Alberta oil: lawsuit

B.C. mining firm wants award upheld

Venezuela is sourcing Alberta oil as part of a scheme to prevent a Vancouver firm from seizing assets of companies controlled by the South American country, a Calgary lawsuit claims.

Rusoro Mining Ltd. wants an Alberta court to uphold the $1.4-billion award it received from an international tribunal over Venezuela’s nationalization of its gold mining assets.

Rusoro also wants a court order blocking entities associated with Venezuela’s state oil company, PDVSA, from exporting Alberta crude to the U.S. to avoid putting its own assets at risk.

Shipments of Alberta oil to U.S. refineries controlled by Venezuelan-linked companies are replacing dwindling shipments of imported crude from Venezuela, the lawsuit alleges.

It states PDV Midwest, a subsidiary of Venezuela’s state oil company, imported 55 million barrels of Canadian crude to its Illinois refinery in 2016.

“Venezuela has deliberately and strategically restructured its worldwide oil supply chain to involve Alberta in satisfying its distribution obligations,” says a statement of claim filed in Calgary Court of Queen’s Bench on behalf of Rusoro.

The purpose of using Alberta, instead of Venezuela oil, is to facilitate “the commercial operations of its largest commercial asset, CITGO Petroleum, without putting Venezuela’s commercial assets at risk of seizure and execution,” the claim states.

“By virtue of the restructuring of its supply chain for crude oil, Venezuela and (the companies) are mobilizing significant assets through the Alberta market for crude oil.

“These shipments are the property and assets of Venezuela and, as such, Rusoro is entitled to execute and enforce the ($1.4 billion) judgment against them.”

Among the remedies sought by Rusoro is a permanent injunction preventing any of the defendant companies from exporting crude they have purchased from Alberta sources.