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Venezuela secretly exports millions of barrels of oil

Written by Paulo Nogueira
Published 18/11/2019 às 09:43

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Venezuela oil export government

The Dragon, a huge Liberian-flagged oil tanker in Venezuela, should be floating somewhere off the coast of France, according to its latest GPS signal.

Instead, it is currently thousands of miles away in Venezuela, where, under contract to Russian state-owned giant Rosneft Oil Co PJSC, it has loaded 2 million barrels of oil, according to data compiled by Bloomberg and shipping reports. How is this possible? How the ship's transponders were turned off before slipping into Venezuelan waters, the data shows.

The practice of tankers turning off their location signals increased last month, according to shipping data, after the US went after a Chinese shipping company that it said was moving crude oil to sanctioned Iran. The US is trying to squeeze the Nicolas Maduro government in Venezuela by starving oil revenue. But more and more tankers appear to be using the technique to avoid penalties, helping to boost Venezuelan oil production that has plummeted since the US imposed sanctions.

Venezuela loaded 10,86 million barrels of oil in the first 11 days of November, more than double the volume in the same period last month. About half of those barrels were loaded onto ships that turned off their transponders, which later delivered cargoes to China and India, according to data compiled by Bloomberg.

Dynacom Tankers Management Ltd., Dragon's manager, said in an emailed statement that "As of January 2019, none of the ships under our management have ever entered into any contract with any US sanctioned entity, nor have they ever violated any related US sanctions. to Venezuela or otherwise. The company did not comment on why the dragon signal had been off for the past three weeks or confirm whether the ship was docked in the South American country.

Meanwhile, Rosneft said in an emailed statement that it and its subsidiary RTSA "have not chartered ships in this supply chain". Its operations involving Venezuela "are based on contracts reached long before sanctions and fully comply with all rules of international law." . ”The statement did not specifically address the use of transponders.

While it is possible that transponders, known as Automatic Identification Systems, can go offline, they are typically not offline for very long. The practice of hiding ships carrying oil is not new and can be done for competitive purposes or for other reasons. Iran, another US government-sanctioned member of OPEC, also uses dark ships to export its oil.

Recently, the US has attacked Chinese oil importers and shippers like Zhuhai Zhenrong Co. and a unit of COSCO Shipping Corp. for allegedly handling Iranian oil. Zhuhai and COSCO routinely operate their ships with the signal on, ship tracking data shows.

Venezuelan oil production — hurt by U.S. sanctions that have limited its buyers and restricted access to oil tankers — dropped to a new 16-year low of 644.000 barrels a day in September, cutting off much-needed funds for the Maduro regime. Unsold tanks and vessels filled with oil, forcing operators to halt production on Venezuela's oil-producing border known as the Faja.

Earlier this year, Venezuela masked deliveries to Cuba by renaming sanctioned ships and disabling the satellite tracking system, according to shipment data. The Trump administration wants to cut oil supplies to the Caribbean country because it helps pay for intelligence, defense and security assistance to Maduro, the US Treasury Department said.

Darkness became more common after companies such as Unipec, the trading arm of Chinese state-owned giant Sinopec, banned the use of oil tankers that operated in Venezuelan ports over the past 12 months.

While Unipec has officially added to its charter contracts, others are informally avoiding ships that have Venezuela as their last port of call, according to people with knowledge of the situation.

Demand for Venezuelan crude has soared this month, with state oil company Petroleos de Venezuela SA winning customers, including Indian refiner Reliance Industries Ltd. Tipco Asphalt Public Co. Ltd., a refiner in Thailand, is also withdrawing Venezuelan crude in November after a two-month absence.

Source: Information from Bloomberg and authorial text from the website O Valor

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Paulo Nogueira

With a technical background, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.

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