Venezuela stops Dominican oil supply: Update
The country has not received any Venezuelan oil supplies since January, Refidomsa chief executive Felix Jimenez said.
The Dominican Republic has been meeting demand of about 150,000 b/d through imports from the US, Mexico and Nigeria, Jimenez said.
The country is also importing products from Trinidad and Tobago," an official of the Dominican energy ministry told Argus today.
Refidomsa is a joint venture between the Dominican government with 51pc and Venezuelan state-owned PdV with 49pc.
Venezuelan government officials confirmed the Dominican information on oil supply, adding the PdV has cut regional subsidized supplies because of the collapse in oil prices, falling domestic production and a reluctance to regenerate PetroCaribe debt that the Dominican Republic paid off with a steep discount in early 2015. Jamaica paid most of its debt in mid-2015.
Under the 11 year-old PetroCaribe preferential oil supply facility, PdV supplies crude and products to several Central American and Caribbean countries, allowing them to keep a part of the payment as a long-term low-interest loan. The politically driven program is now fading as Caracas struggles to keep up oil flows and revenue.
Santo Domingo has a quota of 50,000 b/d under PetroCaribe, "but we have never received that much, and shipments averaged 30,000 b/d before they were suspended," the ministry official said.
"Venezuela has pledged its oil to China," Jimenez said, alluding to the Venezuelan government's supply commitment to Beijing in exchange for oil-backed loans.
Recent oil market trends illustrate the regional shift away from Venezuelan supply. The US exported 1.16mn bl of crude to Nicaragua from January – August. The first cargo loaded in the Houston Ship Channel at the end of March. Jamaica's refining company PetroJam issued a tender in April to buy 320,000 bl of Colombian medium sour Vasconia for delivery to the Kingston port in May. And Refidomsa issued a tender in May seeking to purchase 300,000 bl of US crude or similar grades for delivery to the Punta Palenque port in June, according to market participants.
Cuba has a similar agreement with Caracas that precedes the 2005 PetroCaribe accord, and has been receiving about 40pc of its traditional average of 100,000 b/d, Cuban officials said in July.
State-run Cuban oil company Cupet has not responded to questions from Argus about the volumes it is now receiving.
The island is receiving alternative light crude supply from Algeria, and is also looking to Russia and Iran.
PdV's oil production has been declining over the past two decades, a trend that has accelerated over the past year in response to a lack of investment.
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