Reuters logo
EXCLUSIVE-Venezuela increased fuel exports to allies even as supply crunch loomed
March 24, 2017 / 5:16 PM / 8 months ago

EXCLUSIVE-Venezuela increased fuel exports to allies even as supply crunch loomed

    By Marianna Parraga and Alexandra Ulmer
    HOUSTON/CARACAS, March 24 (Reuters) - A gasoline shortage in
OPEC member Venezuela was exacerbated by an increase in
government-sanctioned fuel exports to foreign allies and an
exodus of crucial personnel from state-run energy company PDVSA
          , according to internal PDVSA documents and sources
familiar with its operations.
    Leftist-run Venezuela sells its citizens the world's
cheapest gasoline. Fuel supplies have continued flowing despite
a domestic oil industry in turmoil and a deepening economic
crisis under President Nicolas Maduro that has left the South
American country with scant supplies of many basic necessities.
    That changed on Wednesday, when Venezuelans faced their
first nationwide shortage of motor fuel since an explosion
ripped through one of the world's largest refineries five years
ago. At the time, the government of then-President Hugo Chavez
curbed exports to guarantee there was enough fuel at home.
    This week's shortage was also mainly due to problems at
refineries, as a mix of plant glitches and maintenance cut fuel
production in half.
    Unlike five years ago, Caracas has continued exporting fuel
to political allies and even raised the volume of shipments last
month despite warnings within the government-run company that
doing so could trigger a domestic supply crunch.
    Shipments from refineries to the domestic market needed to
be redirected to meet those export commitments, the internal
documents showed.
    "Should this additional volume ... be exported, it would
impact a cargo scheduled for the local market," read one email
sent from an official in the company's domestic marketing
department to its international trade unit.
    Venezuela last month exported 88,000 barrels per day (bpd)
of fuels - equivalent to a fifth of its domestic consumption -
to Cuba, Nicaragua and other countries, according to internal
PDVSA documents seen by Reuters.
    That was up 22,000 bpd on the volumes Venezuela had been
shipping to those two countries under accords struck by Chavez
to expand his diplomatic clout by lowering their fuel costs
through cheap supplies of crude and fuel.
    The order to increase exports came from PDVSA's top
executives, according to the internal emails seen by Reuters.
    Venezuela's oil ministry and state-run PDVSA, formally known
as Petroleos de Venezuela SA, did not reply to requests for
comment for this story.
    
    FUEL STRAIN, BRAIN DRAIN
    The strain on the country's fuel system has been worsened by
the departure of staff in PDVSA's trade and supply unit who are
key to ensuring fuel gets to where it's needed and making
payments for imports, three sources close to the company said.
    The unit has seen around a dozen key staffers depart since
Maduro shook up PDVSA's top management in January. Among those
who left was the head of budget and payments, two sources said.
            
    "Every week someone leaves for one reason or another," said
a PDVSA source familiar with the unit's operations. 
    Some have been fired, while others have left since the
shake-up inserted political and military officials into top
positions and bolstered Maduro's grip on the company that powers
the nation's economy.            
    The imposition of leaders with little or no experience in
the industry has further disillusioned some of the company's
experienced professionals and accelerated an exodus that had
already taken hold as economic and social conditions in
Venezuela worsened. 
    A recent internal PDVSA report seen by Reuters mentioned "a
low capacity to retain key personnel," amid salaries of a few
dozen dollars a month at the black market rate.
    
    UNPAID BILLS
    The departure of staff responsible for paying suppliers, as
well as a cash crunch in the company and the country, have led
to an accumulation of unpaid bills for fuel imports into
Venezuela.
    Had those bills been paid, the supply crunch would have been
less acute, the company sources said.
    About 10 tankers are waiting near PDVSA ports in Venezuela
and the Caribbean to discharge fuel for domestic consumption and
for oil blending. 
    Only one vessel bringing fuel imports has been discharged
since the beginning of the week, shipping data showed.
    PDVSA ordered some of the cargoes as it prepared alternative
supplies while refineries undergo maintenance.
    The tankers sitting offshore will not unload until PDVSA
pays for their cargoes, said shippers and the company sources.
    Should PDVSA pay - up to $20 million per cargo - shortages
could blow over relatively soon. 
    The cash-strapped company has struggled since the global oil
price crash that began in 2014 cut revenue for its crude
exports. PDVSA is tight on cash as it prepares for some $2.5
billion in bond payments due next month. 
    While the vessels sit offshore, lines of dozens of cars
waited at gas stations in central Venezuela on Wednesday and
Thursday. The shortages angered Venezuelans who already face
long lines for scarce food and drugs.             
    PDVSA blamed the supply crunch on unspecified problems for
shipping fuel from domestic refineries to distribution centers.
The company said it was working hard to solve the gasoline
situation by boosting deliveries to the worst-hit regions. 
    A shortage of trucks to move refined products has also
caused bottlenecks, oil workers told PDVSA President Eulogio Del
Pino during a visit to a fuel facility this week, asking for
help. Trucks are in short supply because the country does not
have enough funds to pay for imports of spare parts.
    It was unclear when fuel supplies would return to normal,
although by late Thursday PDVSA appeared to have distributed
some fuel from storage to Caracas and the eastern city of Puerto
Ordaz. Lines to fill up at gasoline stations shortened in both
cities, according to Reuters witnesses.

 (Additional reporting by Mircely Guanipa in Punto Fijo and
Maria Ramirez in Puerto Ordaz; Editing by Simon Webb and
Jonathan Oatis)
  

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below