Venezuela's deteriorating oil quality riles major refiners

[thackney]

Venezuela's deteriorating oil quality riles major refiners
https://www.reuters.com/article/us-venezuela-oil-insight/venezuelas-deteriorating-oil-quality-riles-major-refiners-idUSKBN1CN2EO
OCTOBER 18, 2017

Venezuela’s state-run oil firm, PDVSA, is increasingly delivering poor quality crude oil to major refiners in the United States, India and China, causing repeated complaints, canceled orders and demands for discounts, according to internal PDVSA documents and interviews with a dozen oil executives, workers, traders and inspectors.

The disputes involve cargoes soiled with high levels of water, salt or metals that can cause problems for refineries, according to the sources and internal PDVSA trade documents seen by Reuters.

The quality issues stem from shortages of chemicals and equipment to properly treat and store the oil, resulting in shutdowns and slowdowns at PDVSA production facilities, along with hurried transporting to avoid late deliveries, the sources said.

U.S. refiner Phillips 66 (PSX.N) canceled at least eight crude cargoes because of poor oil quality in the first half of the year and demanded discounts on other deliveries, according to the PDVSA documents and employees from both firms. The canceled shipments - amounting to 4.4 million barrels of oil - had a market value of nearly $200 million....

[thackney]

Along with quality, quantity continues to fall as well:

http://fingfx.thomsonreuters.com/gfx/rngs/VENEZUELA-OIL/010051B32Y7/index.html

[thackney]

San Antonio’s NuStar reportedly stops Venezuela’s oil company from using Caribbean terminal
http://www.mysanantonio.com/business/eagle-ford-energy/article/San-Antonio-s-NuStar-reportedly-stops-12299291.php
October 23, 2017

Missed payments are forcing San Antonio-based NuStar Energy to stop Venezuela’s state-run oil company PDVSA from using its Statia oil terminal, according to a Reuters report.

On Friday Reuters reported that NuStar was stopping PDVSA from using its 14.4 million barrel storage terminal on the Caribbean island of St. Eustatius because PDVSA owes the San Antonio company more than $26 million in charges....

[thackney]

Venezuela's unpaid debt just grew to nearly $600 million, days before a make-or-break bill
https://www.cnbc.com/2017/10/23/venezuela-has-missed-nearly-600m-in-payments-before-a-cant-miss-bill.html
10/23/2017

Venezuela blew past another two bond payments this past weekend, adding hundreds of millions of dollars to a growing pile of unpaid bills just days before the first of two can't-miss debt deadlines.

The beleaguered petrostate has now missed $586 million in payments tied to the debt of the government; state oil giant Petroleos de Venezuela, SA; and the utility Electricidad de Caracas, three investment firms focused on developing and frontier markets confirmed.

"I don't see how any person who's involved in Venezuelan debt can be anything except concerned, except for those who have credit default swaps," said Russ Dallen, managing partner at Caracas Capital Markets. Holders of the swaps benefit in the event of a debt default.

As of last Friday, Venezuela had racked up $349 million in unpaid bond interest. This weekend, it failed to make payments totaling $237 million due on another two sovereign bonds....

[Cyber Liberty]

Saw a story last year the condition of the ships themselves is a contributory factor....

[thackney]

And from an earlier article:

The problem with a bond default is that it would expose Venezuela to huge legal and economic costs. Legally, following a default, Venezuela would not be able to safely sell oil into the U.S. market because aggrieved creditors would have no problem obtaining court orders to grab any tanker of government-owned oil that arrives in a U.S. port. This would force Venezuela to sell its oil at rock-bottom prices to intermediaries or to try to ship more of it to Russia or Asia for refining. As a result, Venezuela is under huge pressure to make its upcoming debt payments or to swiftly adapt to a future without access to the U.S. market.

http://thehill.com/opinion/national-security/355151-the-economic-case-for-a-regime-change-in-venezuela

[IsailedawayfromFR]

The one member of OPEC that is a socialist country is in the worst shape of any of them.

Seems there should be a correlation?