May 24 The United States on Tuesday announced
new sanctions on Venezuela's state oil company PDVSA and six
other smaller oil and shipping companies for engaging in trade
with Iran in violation of a U.S. ban.
Deputy Secretary of State James Steinberg said the
sanctions on PDVSA would prevent it from access to U.S.
government contracts and import/export financing, but would not
affect the company's sale of oil to the United States or the
activities of its subsidiaries. [ID:nN24277213]
Steinberg said the new U.S. sanctions were aimed at
squeezing Iran's gasoline supplies, and could have a serious
impact as other companies recognize the risks of doing business
with the Islamic Republic as it faces increasing isolation over
its nuclear program.
Venezuelan President Hugo Chavez in 2009 agreed to supply
Iran with around 20,000 barrels per day of gasoline to help the
country deal with international sanctions that have limited its
ability to import fuels. Later, in 2010, Venezuelan officials
claimed that PDVSA had halted direct fuel supplies to Iran,
saying the country had resolved its fuel shortages.
Venezuela is one of the largest foreign suppliers of crude
to the United States and is home to the largest oil reserves
outside of the Middle East.
The U.S. is the largest oil trade partner to Venezuela.
In 2010, Venezuela's oil shipments to the U.S. averaged
987,000 barrels per day. In February 2011, the country shipped
878,000 bpd, according to the Department of Energy. The
sanctions would not affect the sales.
In the United States, PDVSA's refineries are operated by
Citgo Corp, which is controlled by Venezuela's government and
indirectly owned by PDVSA. The language of the new sanctions
does not indicate that they would impact Citgo's activities.
The five U.S.-based refineries have combined processing
capacity of about 1.08 million bpd, according to Citgo figures.
These are (in barrels per day):
Wholly-owned U.S. refineries - 759,500
* Lake Charles, Louisiana 429,500
* Corpus Christi, Texas 163,000
* Lemont, Illinois 167,000
Refinery joint ventures share 271,250
* Chalmette, Louisiana 192,500
50/50 with Exxon Mobil Corp (XOM.N)
* St. Croix, Virgin Islands 350,000
50/50 with Hess Corp. (HES.N)
* Merey Sweeny LP 70,000 delayed coker
50/50 with ConocoPhillips (COP.N)
Venezuela also directly ships oil products like gasoline and
diesel to the United States, processed in its own refining
network with capacity near 1.3 million bpd.
EXPLORATION AND PRODUCTION
Chevron Corp (CVX.N) is the only U.S. oil major with
exploration and production operations in Venezuela. The new
sanctions are unlikely to affect those activities, said Harry
Clark, a partner and international trade expert at law firm
Dewey & Leboeuf in Washington.
Both ConocoPhillips and Exxon Mobil had exploration and
production activities in Venezuela which were seized during a
nationalization campaign after President Hugo Chavez took over
operations at several oil projects.
The two companies are currently in arbitration with
(Reporting by Janet McGurty and Joshua Schneyer; compiled by
Janet McGurty; Editing by Marguerita Choy)
(firstname.lastname@example.org; Reuters Messaging:
email@example.com; 646 226 3027))