(Reuters) - A court in Aruba on Wednesday lifted the seizures of two oil cargoes that ConocoPhillips (COP.N) sought as part of a legal strategy to satisfy a $2 billion (£1.5 billion) arbitration award, according to a source familiar with the decision.
Conoco has aggressively moved to take over Venezuela’s state-run PDVSA oil inventories, assets and cargoes in the Caribbean, which is used by PDVSA as a hub for crude blending, refining and exporting to mostly Asian destinations. In April, the International Chamber of Commerce said the U.S. oil company was due the money over the 2007 nationalisation of two of its projects in Venezuela.
In recent days, courts in Curacao, Bonaire and Aruba have completely or partially lifted the attachments, mainly citing the potential for economic harm to the economies of the islands, which are dependent on PDVSA’s refined products.
Aruba’s Court of the First Instance said the owner of a crude cargo and a fuel cargo off Aruba was not Venezuela’s state-run PDVSA but its U.S. subsidiary Citgo Petroleum.
A unit of Citgo since 2016 has leased from the government of the island the 209,000-barrel-per-day Aruba refinery, idled since 2014, and a 13-million-barrel terminal mostly used to store crude for feeding the subsidiary’s U.S. Gulf of Mexico refineries.
About 800,000 barrels of Venezuelan crude and imported gasoline, jet fuel and diesel on the tankers Atlantic Lily and Grimstad were seized earlier this month through a court order requested by Conoco. The fuel was for domestic distribution.
“We have expected the process of recovery could take some time,” Conoco spokesman Daren Beaudo said in statement. “As we have said, we intend to pursue all available legal avenues to obtain full and fair compensation.”
PDVSA and Citgo are responsible for supplying Curacao’s state-owned Curoil NV and other fuel distributors in Aruba, Curacao and Bonaire.
Aruba’s Prime Minister Evelyn Wever-Croes last week said no fuel shortages had been reported, but officials were trying to import from other sources.
In Curacao, a court order seizing PDVSA’s crude and fuel inventories at the 335,000-barrel-per-day Isla refinery was partially lifted earlier this month to allow Curoil to continue receiving and distributing fuel. The proceeds will be deposited into an escrow account until the Conoco-PDVSA dispute is ultimately resolved.
In Bonaire, the PDVSA-owned terminal of BOPEC was also seized but Conoco allowed Curoil to have access to fuel inventories there to continue to supply a utility.
Reporting by Sailu Urribarri and Marianna Parraga; Editing by James Dalgleish and Grant McCool