Peter Howard Wertheim
OGJ Correspondent
RIO DE JANEIRO, July 14 -- Venezuela's oil exports to the US decreased by 6% in the first quarter, according to the US Department of Energy. Venezuela shipped 178.2 million bbl of oil and oil products to the US in the first quarter, compared with 190.1 million bbl in the same period of 2005.
State-owned Petroleos de Venezuela SA (PDVSA) is sending more oil tankers to India and China—seven times more distant than US markets, a traditional importer of some 60% of Venezuela's oil exports (OGJ Online, July 13, 2006).
Venezuela accounts for about 11% of US oil imports and owns five refineries in the US through PDVSA subsidiary Citgo. Capacities total about 750,000 b/d —4% of the US total.
Venezuela has signed new oil export contracts with China, India, Jamaica, Haiti, Paraguay, and Bolivia even though Venezuela's oil production has not increased.
PDVSA also has suspended sales to 2,000 gasoline stations that operate under Citgo's brand. Citgo must purchase 130,000 b/d of oil from other refiner to distribute to its 13,000 US retail outlets, which it doesn't own. According to Citgo, it "is no longer attractive" to maintain distribution of oil products to its outlets in several American states.
Citgo made the decision to interrupt part of its distribution after Venezuelan President Hugo Chavez claimed that the PDVSA subsidiary's businesses indirectly subsidize the US economy.
During the next 8 months Citgo will withdraw from Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, and South Dakota and will diminish sales in Illinois, Texas, and Arkansas.
Citgo is not considering the sale of any assets and announced that the measure will affect only service contracts of the retail outlets.
Chavez on several occasions has threatened to stop exporting oil to the US or to sell or close Citgo's refineries.
