HOUSTON/PUNTO FIJO, Venezuela, Jan 26 More than 4 million barrels of Venezuelan crude and fuels are sitting in tankers anchored in the Caribbean sea, unable to reach their final destination because state-run PDVSA cannot pay for hull cleaning, inspections, and other port services, according to internal documents and Reuters data. </s> HOUSTON/PUNTO FIJO, Venezuela (Reuters) - More than 4 million barrels of Venezuelan crude and fuels are sitting in tankers anchored in the Caribbean sea, unable to reach their final destination because state-run PDVSA cannot pay for hull cleaning, inspections, and other port services, according to internal documents and Reuters data.

The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas, Venezuela January 11, 2017. REUTERS/Marco Bello

About a dozen tankers are being held back because the hulls have been soiled by crude, stemming from several oil leaks in the last year at key ports of Bajo Grande and Jose, which has resulted in delayed operations for loading and discharging.

Since debt-laden PDVSA cannot afford to have the ships cleaned, they have to wait for weeks to navigate international waters, delaying shipments.

Dirty tankers are the latest of a litany of problems weighing on PDVSA, the source of most of Venezuela’s export revenue and critical to the government’s budget.

Oil production and exports are currently at lows not seen in more than two decades. PDVSA’s difficulty with paying creditors and service providers makes pulling itself out of that hole more onerous. That has contributed to a deep, years-long recession in the OPEC country.

As of Jan. 25, vessels carrying some 1.4 million barrels of crude, diesel, gasoline, fuel oil and liquefied petroleum gas were anchored in Venezuelan and Caribbean waters waiting for cleaning, according to PDVSA’s trade documents, verified by Reuters shipping data. The company did not respond to a request for comment.

“PDVSA almost solved this situation in Bajo Grande in early December because it needed to drain inventories, but it is now taking at least three weeks to complete the cleaning,” said an inspector at Lake Maracaibo, who was not authorized to speak to the press.

The dozen or so tankers that have not been cleaned are mostly from PDVSA’s fleet of owned and leased vessels, according to a series of PDVSA’s internal operational reports confirmed by Reuters vessel tracking data.

In addition, another 11 tankers in early January are being held up for “financial retention,” a classification used by PDVSA in its internal reports to identify loaded vessels that have been embargoed or temporarily retained by port authorities, inspection firms or maritime agencies due to unpaid bills.

Those tankers, along with several smaller ones retained for other operational delays, are holding a combined 2.9 million barrels, according to the data.

The list includes the Aframax Hero, loaded in September with 520,000 barrels of fuel oil bound for China. The cargo is moored in Curacao, delayed by more than 100 days, until a payment to inspection firm Saybolt (CLB.N) is made. [nL1N1CY00P]

PDVSA's crude exports fell to 1.59 million barrels per day (bpd) in the last quarter of 2016 from 1.82 million bpd in the first quarter, a 13 percent decline, according to Thomson Reuters trade flows data. [tmsnrt.rs/2baTeGm]

DIRTY BUSINESS

Vessels started to become soiled by crude in PDVSA’s ports last year amid intermittent oil leaks at Bajo Grande terminal in Venezuela’s Lake Maracaibo, according to sources close to that operation.

Maritime laws prohibit stained tankers from navigating international waters until hull cleaning is performed. While PDVSA’s debts to cleaning firms grow, the leaks have not been repaired, so dozens of vessels have traveled within the country in recent months, spreading the problem to other terminals, including Puerto la Cruz, La Salina, Cardon and Amuay, the documents state.

Cleaning, which is performed at the Guaranao Port, located close to Venezuela’s largest refinery, has taken as much as two months in some cases, an inspector said.

A crude spill at Jose in January stained more tankers, this time affecting vessels waiting to load crude for exports.

PDVSA last week said the affected dock at Jose resumed operations, but there is a logjam of ships needing cleaning, affecting regular foreign buyers of Venezuelan crude, the inspector and a trader from a firm buying Venezuelan oil said. [nL1N1F71I7][nL1N1F80NG]

Some of PDVSA’s joint venture partners in projects in the Orinoco belt have proposed picking up part of the bill, paying cleaning companies in dollars to amortize debts faster and ease the bottleneck, but the state-run firm has refused due to its cash flow constraints, the trader said. </s> A fleet of rundown Venezuelan oil tankers carrying some 4 million barrels of oil and other fuels is wallowing in the Caribbean Sea. Not because of bad weather, or mechanical problems, but because Venezuela’s state-owned oil company, Petróleos de Venezuela SA, doesn’t have the cash to get them to their final destinations.

Beyond the obvious environmental risks, it’s doubly bad news for Venezuela, a country in dire economic straits and full-fledged crisis, with a political impasse, looting, dangerous food and health supply shortages, and massive protests. Venezuela is massively reliant on oil exports to bankroll government services. But the cash-strapped country can’t even find the money to service the vessels that carry its exports. And Venezuela needs the exports to get the cash to service the vessels. It’s a vicious circle.

Before ships can venture into international waters, international maritime law requires safety inspections, hull cleanings, and other services. PdVSA, already mired in debt, can’t foot those bills, leaving crude-stained tankers in the lurch. Further exacerbating the problem is intermittent leaks at Venezuela’s poorly-maintained oil export terminals. The leaks stained incoming and outgoing tankers, creating a backlog of cleaning. Some tankers wait as long as two months for cleaning before being seaworthy, one inspector told Reuters, which first reported the story.

Venezuela, once Latin America’s most powerful petrostate, is on the brink of collapse after decades of economic mismanagement and boiling tensions between President Nicolas Maduro and opposition parties. Low global oil prices haven’t helped.

The global oil cartel OPEC agreed to slash global production late last year, but the small uptick in oil prices likely won’t provide enough reprieve for PDVSA to weather its debt storm; it projects its oil production will linger near a 23 year-low in 2017.

So while Venezuela’s political crisis continues unabated, its sole possible economic lifeline drifts at sea, in aging, dirty tankers. </s> Venezuela’s cash-strapped PDVSA may have barely avoided default last year, but its finances seem to have further worsened. More than 4 million barrels of Venezuelan crude oil and fuels are stuck in tankers in the Caribbean because Venezuela’s state-run oil firm cannot afford to pay for cleaning dirty tankers and port inspections, Reuters reports, quoting internal company reports and Reuters tanker tracking data.

According to PDVSA’s trade documents and Reuters shipping data, some dozen tankers full of around 1.4 million barrels of crude oil, diesel, fuel oil, gasoline, and LPG were anchored - as of Wednesday - in Venezuelan and Caribbean waters and were waiting to be cleaned.

In addition, another 11 vessels full of oil and oil products have been retained or embargoed by port authorities, maritime agencies and inspection firms because PDVSA has not paid its bills. The 11 tankers and a few smaller vessels held for other operational delays contain a total of 2.9 million barrels of crude and fuels, Reuters data showed.

The dirty tankers were stained with crude oil due to leaks at the Bajo Grande terminal, sources close to the operation told Reuters.



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Since maritime laws do not allow dirty tankers to travel through international waters, and PDVSA’s debts to cleaning services operators have been piling up, those vessels have been circulating Venezuela’s waters and spread the problem to other terminals, including Puerto la Cruz, La Salina, Cardon and Amuay.

PDVSA brings almost all of the export revenues for the equally near-broke Venezuela. Low oil prices have ravaged the oil company, which is the only U.S.-dollar cash cow for the Socialist regime. Last October, PDVSA barely escaped bankruptcy, and more recently, Fitch has pointed out that Venezuela’s state-owned firm, which has $13 billion in high-yield debt, is probably most in danger of default.
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• None Keystone XL Still Faces Obstacles Even With Trump’s Approval </s> HOUSTON (Reuters) - Buckeye Partners LP's Yabucoa oil terminal in Puerto Rico remained closed on Friday, the company said, days after Hurricane Maria left a trail of destruction and at least 25 people dead across the Caribbean.

The U.S. oil storage and transportation company did not say if the tanks at the 4.6-million-barrel terminal were damaged by the storm, which made landfall near Yabucoa, but it said a full assessment of the facility is under way.

"We are working to maintain the safety and well-being of our Yabucoa, Puerto Rico employees," it said in a statement.

A larger terminal operated by U.S. NuStar Energy LP on the island of St. Eustatius, with capacity to store up to 13.03 million barrels of oil, also has been unable to reopen after a previous hurricane, Irma, affected several tanks.

The closure of oil terminals in the Caribbean and restrictions to load and discharge large vessels in several Texas ports have constrained flows of crude and refined products across the Atlantic in recent weeks.

Maria, the second major hurricane to hit the Caribbean this month, lashed the Turks and Caicos Islands on Friday after knocking out power to all of Puerto Rico and pushing several rivers to record flood levels. </s> Buckeye Partners (NYSE:BPL) says its Yabucoa oil terminal in Puerto Rico remains closed in the wake of Hurricane Maria's trail of destruction left across the Caribbean.

BPL has not said if the tanks at the 4.6M-barrel terminal were damaged by the storm, which made landfall near Yabucoa, but a full assessment of the facility is underway.

NuStar Energy's (NYSE:NS) larger terminal on the island of St. Eustatius, with capacity to store up to 13M barrels of oil, also has not reopened after Hurricane Irma affected several tanks.

The closure of Caribbean oil terminals and loading restrictions for large vessels in several Texas ports have constrained flows of crude and refined products across the Atlantic in recent weeks. </s> The project, which the state-owned firm aims to lead with support from the country's oil majors, would give the world's No.2 oil consumer control of the Isla refinery on the tiny island of Curacao that supplies fuel to Venezuela and crude oil to Asia.

State-owned Guangdong Zhenrong agreed a memorandum of understanding (MOU) in September with the government of Curacao, an autonomous Dutch state off Venezuela's northwest coast, to upgrade its aging refinery and build a gas terminal.

A delegation from Curacao, including government lawyers and the head of its refinery facilities, is in southern China this week to visit oil and gas plants, as parties move negotiations beyond the initial cooperation pact, two top executives at the Guangzhou-based China firm said.

"We are discussing with China Construction Bank, China Development Bank, ICBC and Bank of China to provide the bulk of the financing. Some banks have already made detailed proposals," said Chen Bingyan, a company advisor and the project's key negotiator.

Early work showed the project, including the refinery upgrade, increased oil storage and the natural gas facility which is designed to provide clean fuel to local users, would require about $5.5 billion in total investment, Chen said.

The figure was below the $10 billion in September's preliminary agreement, which referred to the eventual size of the investment the Chinese firm committed to spend on Curacao, he said.

The 335,000 barrel-per-day Isla refinery, located just 50 km (31 miles) northwest of Venezuela, has for decades been operated by Venezuela's state oil firm PDVSA under a lease agreement, but the cash-poor company has been reluctant to meet Curacao's requests to modernise the plant, which locals blame for pollution.

China in the last decade has become one of the top buyers of Venezuelan crude and fuel through an oil-for-loans financing deal, and some of its purchases use Curacao as a transfer point.

China purchased nearly 490,000 bpd of crude oil and products from Venezuela in the first nine months this year, roughly 6 percent of its total purchases. C-CN-VE-FZ

Guangdong Zhenrong, an oil and metals trader with little experience in the refining or gas terminal business, is aiming to lead the upgrade project and seek technical and operational support from the country's state energy giants.

The trader hopes to be the single-largest stake holder in the project, and has entered into preliminary cooperation agreements with engineering and construction units of Beijing's top oil firms including CNPC, Sinopec and CNOOC, said Chen and a second top executive.

"As a smallest sibling, we'll lead using our relationship skills. Our bigger brothers will pitch in with their expertise," said the second executive, who asked not to be named.

Sinopec, China's largest refiner would revamp the refinery which was first built in 1918, while CNOOC, which led China's expansion of its LNG import facilities, had been identified as the potential builder and operator of the gas terminal, Chen said.

"[Guangdong Zhenrong] is just a political vehicle. It could subcontract to engineering divisions of Sinopec and CNPC ... The big oils prefer to keep a low profile, not being seen helping PDVSA directly," said Gordon Kwan of Nomura Research.

China Petroleum Engineering & Construction Corp (CPECC), a unit of CNPC is expected to lead in expanding the storage site at Bullenbay to 36 million barrels, double the current size.

Sinopec declined to comment. CNOOC didn't immediately respond to a request for comment, while CPECC was not immediately available.

Guangdong Zhenrong, which posted sales of 68.7 billion yuan ($10.14 billion) in 2014, also won approval from Myanmar earlier this year to build a long-planned $3 billion refinery in the Southeast Asian nation. ($1 = 6.7743 Chinese yuan renminbi) (Reporting by Chen Aizhu; Editing by Richard Pullin) </s> MADRID (AP) — A super tanker believed to be breaching European Union sanctions by carrying a shipment of Iranian crude oil to war-ravaged Syria has been detained in Gibraltar.

In a statement, authorities on the British overseas territory at the tip of Spain said the port and law enforcement agencies, assisted by the Royal Marines, boarded the Grace 1 early Thursday.

It added that the vessel was believed to be headed to the Baniyas Refinery in Syria, which is a government-owned facility under the control of Syrian President Bashar Assad and subject to the EU's Syrian Sanctions Regime.

The EU, and others, has imposed sanctions on Assad's regime over its continued crackdown against civilians. They currently target 270 people and 70 entities.

The Gibraltar authorities didn't confirm the origin of the ship's cargo but Lloyd's List, a publication specialized in maritime affairs, reported this week that the Panama-flagged large carrier was laden with Iranian oil. Experts were said to have concluded that it carried oil from Iran because the tanker was not sending geographic information while in Iranian waters. According to a United Nations list, the ship is owned by the Singapore-based Grace Tankers Ltd.

According to the data firm Refinitv, the vessel likely carried just over 2 million barrels of Iranian crude oil. Tracking data showed that the tanker made a slow trip around the southern tip of Africa before reaching the Mediterranean.

The timing for the interdiction of the Grace 1 was politically sensitive as tensions between the U.S. and Iran grow over the unraveling of a 2015 nuclear deal with President Donald Trump's withdrawal last year.

In recent days, Iran has broken through the limit the deal put on its stockpile of low-enriched uranium and plans on Sunday to boost its enrichment. Meanwhile, oil tankers near the Strait of Hormuz have been targeted in mysterious attacks as Iranian-backed rebels in Yemen launch bomb-laden drones into Saudi Arabia. The U.S. has rushed thousands of additional troops, an aircraft carrier, B-52 bombers and F-22 fighters to the region, raising fears of a miscalculation sparking a wider conflict.

There was no immediate reaction from Syria, which has suffered severe fuel shortages as a result of the civil war and Western sanctions that have crippled the country's oil industry, once the source of 20 percent of government revenues.

Iran, which has provided vital military support to Assad, extended a $3 billion credit line for oil supplies beginning in 2013 but the Iranian aid dwindled as Washington restored tough sanctions. In November, the U.S. Treasury Department added a network of Russian and Iranian companies to its blacklist for shipping oil to Syria and warned of "significant risks" for those violating the sanctions.

Fabian Picardo, Chief Minister of Gibraltar, which has in the past been a transit port for energy shipments without known buyers, said he has informed the EU about developments.

In a statement, the British government welcomed the "firm action" by authorities in Gibraltar.

Gambrell reported from Tehran. AP reporters Zeina Karam in Beirut and Danica Kirka in London contributed to this report. </s> CARACAS, Venezuela — Venezuela’s widespread gasoline shortages are starting to affect some cities in Colombia, where drivers depend on cheap fuel smuggled in from their socialist-governed neighbor.

Residents of the Colombian border city of Cucuta lined up for several hours outside local gas stations on Wednesday to fill their tanks fearing that shortages will get worse.

“This is going to make everything more expensive” said Teofilo Fernandez, a retired journalist who queued for four and a half hours at a Cucuta gas station to fill up his white Mazda sedan. “We have become accustomed to subsidized gas, and these changes are going to have a negative impact.”

Drivers in Cucuta and other cities along the border often buy gasoline from street vendors who have the fuel smuggled from Venezuela, where government subsidies keep prices at almost zero, allowing the smugglers to profit even when they sell it in Colombia below official prices.

But Venezuela’s gasoline shortages have left street vendors and smugglers with almost no fuel to sell in the black market, and have sent thousands of drivers and motorcycle owners to legal gas stations that are now struggling to meet demand.

Maria Eugenia Martinez, director of the association of gas stations for the border state of North Santander, said her organization is asking Colombia’s government to increase the amount of gas that is sold each month to the region at subsidized prices.

Martinez said Cucuta and North Santander are allotted 10.5 million gallons of subsidized fuel a month by Colombia’s Ministry of Energy, but she said they now need at least 14 million gallons each month to make up for the shortages of illegally imported Venezuelan fuel.

While gasoline in Cucuta costs around $2.25 a gallon, in Venezuela fuel is so cheap that the tank of a large sedan can be filled up for less than a penny. But U.S. sanctions on Venezuela’s state-run oil company, combined with years of economic mismanagement and decaying refineries, have made fuel increasingly hard to come by.

Across the border from Cucuta, in the Venezuelan state of Tachira, lines outside gas stations stretch for miles, and drivers report waiting up to four days to fill their tanks.

The situation has created ample opportunities for corruption, with gas station personnel reportedly taking bribes in U.S. dollars and Colombian pesos from desperate drivers who want to skip queues.

Lines in Cucuta are shorter than those on the Venezuelan side of the border. But residents of the border city say the shortages are already affecting the local economy, by raising the prices of taxi rides and decreasing the frequency of some bus routes.

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Tankers anchored in the Caribbean Sea are unable to deliver over four million barrels of crude oil, due to Venezuela's state-owned oil and natural gas company being unable to pay for hull cleaning, inspections, and other port services.