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UPDATE 1-Venezuelan oil company PDVSA blasts 'financial blockade'
August 18, 2017 / 7:26 PM / a month ago

UPDATE 1-Venezuelan oil company PDVSA blasts 'financial blockade'

(Adds details on tanker, financial context)

By Alexandra Ulmer and Corina Pons

CARACAS, Aug 18 (Reuters) - A U.S.-led “blockade” has hurt Venezuelan state oil company PDVSA’s capacity to undertake routine financial transactions, and forced it to rely on political allies like China and Russia, the company’s president said on Friday.

“They’re blocking our payments,” said PDVSA’s Eulogio Del Pino in a televised speech, criticizing “the empire” for seeking to sabotage the OPEC nation’s socialist government.

“We have to do financial tourism, we have to go to China, we have to do financial triangulations because they’re already applying a financial blockade on our country,” added Del Pino.

Details were not immediately available and PDVSA did not respond to a request for further information.

Crisis-wrought Venezuela and cash-strapped PDVSA are facing increasing difficulties getting financing from banks worried about reputational risk and providers who fear they will not be paid.

Major banks are cutting exposure to Venezuela because of its political upheaval. Some have closed accounts linked to officials who have had sanctions leveled against them by the U.S. government and have refused to provide correspondent bank services or trade in government bonds.

The United States is considering further economic sanctions that would dry up the country’s access to Wall Street.

Leftist President Nicolas Maduro claims a Washington-backed right-wing conspiracy is seeking to sink his government by curtailing its financing during a bitter recession and low oil prices.

TANKER TROUBLES

In the latest controversy, a tanker carrying a cargo of about 1 million barrels of Venezuelan heavy crude has been stranded for more than a month off the coast of Louisiana for lack of a bank letter of credit to discharge, three sources told Reuters this week.

The tanker Karvounis carrying Venezuelan oil is anchored at South West Pass off the coast of Louisiana, according to Reuters vessel tracking data. PBF Energy Inc, the intended buyer of the cargo, has been trying unsuccessfully to find a bank willing to provide a letter of credit to discharge the oil, according to two trading and shipping sources.

Crude sellers typically request letters of credit from customers that guarantee payment within 30 days after a cargo is delivered. The documents must be issued by a bank and received before the parties agree to discharge.

Del Pino appeared to confirm the story on Friday, without providing details on the client or tanker. He said the client had asked for the crude to be unloaded without a letter of credit and declined to make upfront payment as requested by PDVSA.

“They say there’s a tanker blocked because of the blockade? Please. They’re the ones who have to pay and pay ahead of time if they want us to load,” said Del Pino.

“We said, ‘don’t load it,’ this crude is not going to be loaded until they pay us ahead of time and with proper guarantees, this is your problem,” he added.

Additional reporting by Andreina Aponte; Editing by Chizu Nomiyama

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