Two weeks ago, ConocoPhillips obtained two court orders for the seizure of PDVSA assets in the Caribbean in an attempt to enforce a court ruling that has awarded the USA company with US$2 billion in compensation for the forced nationalization of its assets by the Hugo Chavez government 11 years ago. The legal action was the latest in the Caribbean to enforce a United States dollars 2 billion arbitration award by the International Chamber of Commerce (ICC) over the nationalization.
While it seized some assets this month, Conoco is clearly telegraphing that it intends to escalate its campaign against PDVSA across the globe as it works to recoup its losses. That threatens to further limit revenue at the state-controlled firm, the single largest moneymaker for the OPEC member.
Houston-based Conoco is seeking to recover $2 billion in a dispute over expropriation of its oil projects by Venezuela's economically struggling socialist government.
Conoco has filed with courts in the United States, Hong Kong, the United Kingdom and throughout the Caribbean in an attempt to begin the legal process of seizing additional PDVSA assets, said Lance.
PDVSA itself said in a recent technical report that its biggest refining complex, Paraguana refining Center, with a capacity of 955,000 bpd of crude was operating at just 19 percent of that.
Conoco has had early success in some Dutch regions of the Caribbean due to specific legal statutes, though other jurisdictions are expected to take longer, Lance said.
The moves have disrupted fuel deliveries throughout the Caribbean, much of which depend on PDVSA.
Aruba's prime minister, Evelyn Wever-Croes, told journalists on Tuesday that the situation with Conoco in the Caribbean is worrisome. "We are concerned about putting them in the middle of this thing, between PDVSA and ourselves".
Reuters reported that PDVSA was preparing to shut down the 335,000 barrel-per-day Isla refinery it operates in Curacao amid threats by Conoco to seize cargoes sent to resupply the facility.
The utilities, which include power and water company Aqualectra and fuel distributor Curoil, said a lack of fuel could have a severe impact on their operations and therefore on the local population.
Houston-based Conoco has two other outstanding arbitration awards against PDVSA.