Chevron, Vitol, Trafigura vie to control Venezuelan oil exports, sources say

SEATTLE (Oil Monster): Oil major Chevron Corp, global trading houses Vitol and Trafigura, and other firms are competing for U.S. government deals to export crude oil from Venezuela, according to sources familiar with the matter.

The competition reflects a desire by many in the oil industry to access the South American country's crude stocks and production, with U.S. officials seeking to control Venezuelan oil sales indefinitely.

U.S. President Donald Trump has demanded that Venezuela give the United States full access to its oil sector just days after the U.S. captured the South American country's President Nicolas Maduro on Saturday. U.S. officials have said Washington will control the country's oil sales and revenues indefinitely.

Both Vitol and Trafigura were set to join Chevron and other major oil companies in meetings at the White House on Friday over the roles they may have in Venezuela's oil industry, Reuters reported on Thursday.

Ahead of the meetings, the companies have been lobbying the U.S. government hard to secure a share of what are expected to be lucrative oil export agreements from Venezuela.

The companies are contesting initial deals to market the up to 50 million barrels of oil that state-run oil company PDVSA (PDVSA.UL) has accumulated in inventories amid a severe oil embargo that has involved four tanker seizures, two of the sources said.

This week, PDVSA said negotiations were progressing, but provided no details. Its main joint venture partner, Chevron, is well placed to negotiate an expansion of its license to operate in Venezuela as the only major oil company still in the country.

Chevron could also trade at least a portion of PDVSA's own production, three sources said. However, for the first time in years, the U.S. oil major must compete with other foreign companies.

PDVSA wants to make sure that joint venture partners and former customers are part of the deal so it can complete debt repayment, expand output and secure fair prices for crude grades bound for specific destinations, two of the sources said.

On Wednesday, the U.S. Department of Energy said it was engaging with commodity marketers and banks to execute and provide financial support for Venezuelan crude and fuel sales. It did not specify which companies.

Details about the competition for these contracts had not previously been reported.

The sources requested anonymity to discuss confidential information. Vitol and Trafigura declined to comment. Chevron, PDVSA, and the White House did not immediately reply to requests for comment.

Courtesy: www.reuters.com