Brazil swaps gasoline with fuel-starved Venezuela

Jan. 6, 2003
In a swap for future crude oil deliveries from Venezuela, Petroleos Brasileiro SA (Petrobras) has provide 520,000 l. of gasoline to Petroleos de Venezuela SA (PDVSA) to relieve the fuel shortage caused by a general strike that has virtually shut down Venezuela's national oil company.

In a swap for future crude oil deliveries from Venezuela, Petroleos Brasileiro SA (Petrobras) has provide 520,000 l. of gasoline to Petroleos de Venezuela SA (PDVSA) to relieve the fuel shortage caused by a general strike that has virtually shut down Venezuela's national oil company (see related story, p. 29).

With an estimated 90% of PDVSA employees participating in the strike that began Dec. 2 aimed at ousting Venezuelan President Hugo Chávez, exports of Venezuelan crude and petroleum products have come to a virtual halt, with 40 tankers sitting idle outside that country's ports.

Acting on a personal appeal from Chávez, Brazil's President Fernando Henrique Cardoso Dec. 23 requested that Petrobras provide the gasoline to Venezuela. Brazil is a net importer of crude.

Prior to the strike, Venezuela, a founding member of the Organization of Petroleum Exporting Countries, was the fifth largest exporter of crude in the world. However, its current lack of fuel as a result of the strike is severely affecting the country's economy, and curtailment of crude exports is pushing up international prices.

President Cardoso noted that, although the charter of the Organization of Ameican States calls for members to cut off trade relations with countries that have nonelected governments, Chávez was legally elected to office.

Marco Aurélio Garcia, international representative of Brazil's President-elect Luiz Inácio Lula da Silva, recently returned from a 4-day visit to Venezuela where he reportedly promised Chávez that Lula would send two tankers: one loaded with gasoline and the other empty. Chávez also asked technicians in neighboring countries to unload the crude.