PDVSA turns to traders to sustain Ecuador oil deal
In an examination of shipping data that highlights the practical risks of political trade deals, Reuters found that half the fuel Venezuela sent to Ecuador, which cannot process its own heavy crude, came from third countries, often via trading companies including Glencore.
What was meant to be an example of cooperation between ideologically aligned states, with Venezuelan President Hugo Chavez importing Ecuadorean crude in return for refined fuel, has instead become another sign of problems in PDVSA’s refining network and a profitable niche for foreign traders.
It is also the latest indication of difficulties for PDVSA, one of the world’s biggest oil companies and the cash cow of Chavez’s “21st century” socialism. In an election year in Venezuela, PDVSA’s finances are under growing pressure as Chavez digs deep into its coffers to fund welfare programs.
The shipments to Ecuador were corroborated by some traders involved in the deals - and show that the system appeared to stumble after its first year.
So Venezuela turned to third countries and traders, often derided by Ecuadorean President Rafael Correa as speculators, for many of the supplies. Sources said Venezuela paid the transport costs for bringing cargoes from countries that also included Britain, France, the Netherlands and Colombia.
“PDVSA has made deals but then doesn’t have the agreed products, whether due to problems with refining, production or quality,” said one trader involved in the transactions who asked for anonymity.—Agencies