Conoco/Phillips the oil giant based in the U.S. is moving on taking over Caribbean assets of PDVSA the state-run Venezuelan oil business to enforce an arbitration award of $2 billion over a nationalization of its projects more than a decade ago in the South American country, said sources close to the situation.
The company targeted facilities that are located on the islands of Bonaire, Curacao and St. Eustatius that represented about 25% of the oil exports in 2017 by Venezuela. The three facilities play important roles in the processing, blending and storing of PSVSA oil that is exported.
The company was given court attachments that froze assets at two of the three facilities and could decide to sell them, said one of the three sources releasing information on this situation.
The legal maneuvers by Conoco could bring even more problems to the declining oil revenue of PDVSA and the convulsing economy of the country.
Venezuela has almost become completely dependent on its oil exports, which have dropped by 33% since their peak and Venezuelan oil refineries ran at only 31% capacity during the first three months of 2018.
The country is now going through a very deep recession that has severe shortages of food and medicine as well as a huge and growing exodus of the population.
The foreign ministry of Venezuela and PDVSA did not respond to messages requesting a comment. Authorities from the Netherlands said they were assessing the situations taking place on Bonaire.
The claims by Conoco against PDVSA and Venezuela in international courts total more than $33 billion, the largest of any company.
The U.S. company said it would work with local authorities and the community to address any issues that might arise due to the enforcement actions that were brought on by Conoco against PDVSA.
PDVSA has substantial assets in different areas of the Caribbean. It owns a terminal that is 10 million barrels in size on Bonaire. The terminal handles fuel the logistics and the fuel shipments to clients particularly ones located in Asia. On Aruba, PDVSA and Citgo, its unit there, lease a storage terminal and refinery.
On St. Eustatius, PDVSA has storage tanks it rents at Statia terminal, which is owned by NuStar Energy which is based in the U.S. At the storage tanks, more than 4 million barrels of crude owned by Venezuela were retained by a court order, said the sources.