More pressure on #BP over ties to #Rosneft as fuel supplier to Russian army

 

Rosneft has been under US and EU sanctions since Russia annexed Crimea in 2014. Those measures were designed to ensure Rosneft could still export oil and gas but stymie its future growth. As a result, BP was still able to report profits of more than $2.4bn from its Rosneft stake last year and collect $640mn in dividends, while Looney has continued to sit on the Russian group’s board.

Is there room for #Rosneft within @BP?

BP's 19.75% equity stake in Rosneft is once again in the spotlight as the Ukraine crisis deepens. 

The UK major is the largest private shareholder in Russia’s state oil giant, with the stake accounting for BP's largest single asset. Rosneft contributes a third of BP’s group production and more than half of its oil reserves, underpinning the company’s claim to a low-cost oil portfolio. Rosneft’s oil and its plans to grow production don’t exactly jibe with BP's ambitious strategy to lower its emissions. And with geopolitical risk for Russian investments now rising, it begs the question: Is there room for Rosneft within BP? BP’s Rosneft stake added more than $2.4 billion in equity earnings and $640 million in dividends to the company’s pocket in 2021. With BP’s portfolio production set to decline and Rosneft’s on the rise, the importance of the Russian giant to BP’s total output looks destined to grow. Rosneft’s lifting costs of less than $3 per barrel are significantly lower than the BP average and among the lowest in the world.

See the whole article on Energy Intelligence here: 

BP-Rosneft Ties Draw Greater Scrutiny: BP's 19.75% equity stake in Russian oil giant Rosneft is once again in the spotlight as the Ukraine crisis deepens.

#PDVSA prepares fuel rationing program as US #sanctions hamper imports

PDVSA prepares fuel rationing program as US sanctions hamper imports: sources

Caracas, Venezuela — Venezuela's PDVSA is preparing a fuel rationing plan for domestic consumers as the state-owned company confronts a shortfall of refined products and the consequences of US sanctions on production and trading activities, according to sources.

Staring at a 58% shortfall in gasoline and a 71% shortfall in diesel and as US sanctions bite increasingly harder, PDVSA is preparing a rationing plan that could take effect in the next few weeks, according to sources and local media reports.

"The supply of strategic fuels to the national market is the priority at the moment," according to a PDVSA official who spoke with S&P Global Platts on the condition of anonymity.

"In February and March, we expect local demand for 95 and 91 octane gasoline will be 217,000 b/d and diesel consumption to average 110,000 b/d," the official said.

Preliminary PDVSA figures reviewed by Platts indicate average gasoline production for the whole of 2019 was 72,000 b/d, while consumption averaged 142,000 b/d. Imports averaging 70,000 b/d made up the difference.

#PDVSA having hard time finding buyers for 80% of February crude #Oil production

"For February, there is 661,000 b/d of crude that has no takers. Also, PVDSA is offering to pay debts with crude to creditors but there are no interested parties," the official added.

PDVSA has offered deep price discounts for its crude, and flexible loading windows of more than 30 days  ...

The volume available for sale represents 80% of the 850,000 b/d total crude production estimated by PDVSA for February  

Highlights

Caracas, Venezuela — Venezuela's state owned PDVSA has 677,000 b/d of crude available to sell for February, but no buyers because of US sanctions, according to a company official.

"The climbing of US sanctions against the Nicolas Maduro government alienated the few clients that were still daring to enter Venezuelan ports," said a PDVSA official, who spoke on condition of anonymity.

"For February, there is 661,000 b/d of crude that has no takers. Also, PVDSA is offering to pay debts with crude to creditors but there are no interested parties," the official added.

In bid to Survive, #Venezuela’s Maduro Gives Up @PDVSA’s Control Over #Oil

• Chevron is the biggest producer with 160,000 bopd. 
• Pdvsa's biggest ally has been Russia's Rosneft, which over the past year has grown to sell about two-thirds of Venezuela's oil. Rosneft has quickly replaced Pdvsa's American sales routes by diverting its oil to Asia, often obscuring the cargo's source and destination to bypass sanctions

To Survive, Venezuela's Leader Gives Up Decades of Control Over Oil

By Anatoly Kurmanaev and Clifford Krauss

Feb. 8, 2020

Faced with a severe economic crisis, the country's leader, Nicolás Maduro, is letting foreign firms take over daily operations of its oil fields. It's a break with core tenets of his socialist revolution.

Drivers line up at a Petróleos de Venezuela gas station. The company, once a dominant presence in the country's oil fields, is unraveling.Adriana Loureiro Fernandez for The New York Times

CARACAS, Venezuela — After decades of dominating its oil industry, the Venezuelan government is quietly surrendering control to foreign companies in a desperate bid to keep the economy afloat and hold on to power.

The opening is a startling reversal for Venezuela, breaking decades of state command over its crude reserves, the world's biggest.

The government's power and legitimacy has always rested on its ability to control its oil fields — the backbone of the country's economy — and use their profits for the benefit of its people.

But the nation's authoritarian leader, Nicolás Maduro, in his struggle to retain his grip over a country in its seventh year of a crippling economic crisis, is giving up policies that once were central to its socialist-inspired revolution.

Under Venezuelan law, the state-run oil company must be the principal stakeholder in all major oil projects. But as that company, Petróleos de Venezuela, or Pdvsa, unravels — under the weight of American sanctions, years of gross mismanagement and corruption — the work is unofficially being picked up by its foreign partners.

Private companies are pumping crude, arranging exports, paying workers, buying equipment and even hiring security squads to protect their operations in a collapsing countryside, according to managers and oil consultants working on the country's energy projects.

In effect, a stealth privatization is taking place, said Rafael Ramírez, who ran Venezuela's oil industry for more than a decade before breaking with Mr. Maduro in 2017, in a video address this week.

"Today, Pdvsa doesn't manage our oil industry, Venezuelans don't manage it," said Mr. Ramírez. "In the middle of the chaos generated by the worst economic crisis suffered by the country in its history, Maduro is taking actions to cede, transfer and hand over oil operations to private capital."

Pdvsa did not respond to requests for comment on its recent concessions to private partners.

Control over its oil fields — which are the engine of its economy — has long been central to Venezuela's identity and to its socialist-inspired revolution.Meridith Kohut for The New York Times

The haphazard changes to the oil sector, which have accelerated in recent months, are remaking the oil industry in a nation whose assertive energy policies had, since the 1950s, served as an example to developing countries of how to take control of natural resources.

And they are a stark retreat from the vision of Hugo Chávez, who was Mr. Maduro's mentor and predecessor. Mr. Chávez nationalized in 2007 the giant holdings of Exxon Mobil and ConocoPhillips and packed Pdvsa's leadership ranks with political allies dedicated to his socialist-inspired "Bolivarian revolution."

But Mr. Maduro's transformation of Venezuela's oil industry has stemmed the collapse triggered by an American embargo. Sanctions imposed in January 2019 had wiped out about a third of Venezuela's oil production, bringing it down at one point to the lowest level since the 1940s, according to data from the Organization of the Petroleum Exporting Countries.

Oil production now is still less than a third of the total in 1998, when Mr. Chávez took power. By late 2019, Venezuela had stabilized exports at about a million barrels per day, according to Bloomberg's tanker tracking data.

The dribble of oil exports has provided Mr. Maduro with foreign revenue at the most critical moment of the country's economic crisis, allowing him to adjust to sanctions and consolidate his rule.