Web may not boost Venezuela oil exports-refiners

www.alertnet.org Jan 2003 18:53

CARACAS, Venezuela, Jan 10 (Reuters) - Efforts by the Venezuelan government to break a crippling 40-day oil strike by selling crude through through the Internet may not boost shipments from the world's No. 5 exporter, U.S. refiners said on Friday.

The Venezuelan government, which relies on oil exports for half of revenues, is trying to sell oil through Miami-based Web site Pepex.net to overcome a personnel shortage caused by the shutdown by foes of President Hugo Chavez.

The strike has strong support among managers, executives and traders from state oil firm Petroleos de Venezuela (PDVSA) as well as field workers, tanker captains and dock crews.

But U.S. refiners, which normally purchase over half of Venezuela's crude exports, said that dangerous port conditions created by government replacement workers could still hinder them from loading tankers.

"They can't load, the same security problems are there," an official with a U.S. refiner said. Loadings by unqualified and uncertified staff creates insurance risks for firms.

International markets have been denied 80 percent of the 2.7 million barrels per day (bpd) of crude and products the OPEC nation shipped before the strike started on Dec. 2.

The United States usually buys 13 percent of its imported crude from Venezuela, and refiners dependent on certain grades from the South American nation have cut runs.

Striking PDVSA executives said on Friday they do not usually use a tender system such as the one being used on the Pepex Web site to sell crude.

Regular customers said it may be best to wait until PDVSA has officially brought operations back to normal and ports were secured before attempting to lift cargoes again.

"We won't load as long as the force majeure is in place," said one U.S. refiner that buys Venezuelan crude.

PDVSA declared force majeure, meaning it could not meet its contractual obligations, in early December. Some vessels chartered by PDVSA or its U.S. refining affiliate Citgo have loaded with cargoes to the United States and the Caribbean.

Oil production problems have also kept exports choked. The government has only been able to reestablish output to about 450,000 bpd according to one PDVSA official, compared with 3.1 million bpd in November.

Attempts to restart the 130,000 bpd domestic El Palito refiner damaged the vacuum unit, striking PDVSA workers said, and they claim oil has been spilled by tankers loading at the western Lake Maracaibo production areas.