Petroleos de Venezuela

Petróleos de Venezuela, SA (PDVSA) is a Venezuelan state-owned company, whose main activities are the exploitation, production, refining, marketing and transportation of Venezuelan oil, as well as such as the orimulsion, chemical, petrochemical and coal businesses. It was created by government decree on August 30, 1975, after the nationalization of the oil industry, and began operations in 1976.

The oil company has the largest oil reserves in the world, reaching a certified total of 298,353 million barrels at the end of 2013, which represents 20% of the world's reserves of this resource. Once the quantification project has been completed Of the oil reserves in the Orinoco Belt, Venezuela must have proven reserves with a total of close to 316,000 million barrels, most of them corresponding to extra-heavy crude.

Among the facilities on Venezuelan soil, the second largest refinery in the world stands out: the Paraguaná Refining Complex, in the state of Falcón, with a processing capacity of 940,000 barrels of crude oil per day, as well as the refineries in Puerto La Cruz, with a processing capacity of 200,000 barrels per day and El Palito, which refines 130,000 barrels per day.

History

Creation

PDV Gasolinera Pump (Petroleos affiliate of Venezuela), in La Isla de Margarita, Nueva Esparta State, Venezuela

PDVSA was created by government decree on August 30, 1975, absorbing the operations and assets belonging to the Corporación Venezolana del Petróleo on November 2 of that same year and assuming from January 1, 1976 the planning, coordination and supervision of all oil operations in the country, under the supervision of the Ministry of Energy and Mines, in accordance with the legal framework established in the Organic Law that reserves to the State the Industry and Commerce of Hydrocarbons (Organic Law of August 29, 1975). In its beginnings, it mainly carried out the activities of the parent company of the nationalized operating companies, successors of the 13 old private concessionaires existing up to that date, namely:

• Amoven (Amoco's successor)
• Bariven (successor of Sinclair/ARCO)
• Boscanven (Chevron successor)
• Deltaven (Texaco swamp)
• Guariven (Petrolera Las Mercedes, Venezuelan private capital company)
• Lagoven (Creole Petroleum branch of Exxon)
• Llanoven.
• Maraven.
• Meneven (Mene Grande Oil, a subsidiary of Gulf Oil)
• Palmaven (Sun Oil's successor)
• Roqueven (since May 2007 from Phillips)
• Taloven (successor of Talon Petroleum, Venezuelan private capital company)
• Vistaven (Mito Juan, Venezuelan private capital company)

With the exception of Bariven, Palmaven and Deltaven, all these state operators were gradually integrated, so that in 1978 there were only four left, which were finally reduced to 3 in 1986 (Lagoven, Corpoven and Maraven). Bariven was converted in 1980 into the company in charge of purchasing equipment and materials abroad; Palmaven assumed in 1987 the distribution of fertilizers in the national market and assistance to agricultural activities, while Deltaven was reactivated in 1997 to absorb the activities of commercialization of fuels and lubricants in the Venezuelan internal market.

With the creation of the Pequiven subsidiary in March 1978, PDVSA assumed control of the petrochemical industry. The subsidiary "Isla Refinery" was incorporated in October 1985 to operate the refinery leased to Curaçao. In 1986, PDVSA acquired Carbozulia, previously owned by Corpozulia, to exploit the coal seams of the Paso Diablo formation on the Guasare River. To make the Orimulsion fuel production, transportation, and marketing activities independent—developed jointly by the subsidiaries INTEVEP, Lagoven, and Corpoven—PDVSA established the company Bitor (Bitumenes del Orinoco) in 1988 to produce, transport, and market Orimulsion. In 1990, PDV Marina was created with the purpose of integrating the human resources, fleet, equipment and maritime operations of PDVSA and its subsidiaries.

PDVSA manages the resources of Venezuela: oil, gas and coal, its certified proven reserves as of 2010 are:

External oil opening or internationalization

PDVSA Headquarters at Av. 5 de Julio, Maracaibo, Venezuela.

At the end of 1982, PDVSA began the Internationalization or Capitalization Program for the Venezuelan oil industry that lasted until 1998, the main objective being the acquisition of assets outside the country with its own resources or through associations with transnational companies promoted by Article 5 of the Organic Law that Reserves to the State the Industry and Commerce of Hydrocarbons for that time.

Europe

PDVSA began a strategic internationalization program that began with the purchase in 1983 of 50% of a refining and petrochemical complex located in the Düsseldorf area from the German company Veba Öl AG. Other acquisitions were closed in June 1986, with 50% of Nynäs Petroleum, to expand the refinery circuit in Europe.

Germany

In 1983 the company Ruhr Oel and Gas was created, exactly on April 21, an agreement was signed between PDVSA and Veba Öl AG, which was co-owner to manage a group of four German refineries to process heavy and extra-heavy crudes from Venezuela. It was in the government of Luis Herrera Campins that he accepted the transfer of 50% of the shares of German refineries to PDVSA for debts of more than 900 million German marks and an investment program of more than 3 billion marks over three years.. In October 2010, the government sold its shareholding to the Rosneft company, the sale exceeded 1.6 billion dollars. The Ruhr Oel, which has a global processing capacity of 1.04 million b/d, PDVSA owns 50% of the Gelsenkirchen refinery, 19% of Schwedt, 13% of Neustadt and 12% of Karlsruhe; participations that allow PDVSA to supply some 240 thousand b/d. The Ruhr Oel covers 20% of the demand for derivatives and petrochemical products in the German market.

Sweden and England

In 1986, PDVSA signed an association agreement with Nynäs AB Petroleum through which it acquired 50% of the shares of this company, being the second largest asphalt supplier and lubricant supplier in Europe, with four refineries, storage system in almost all of Europe, and 16 asphalt and lubricant distribution terminals. Until 2012, PDVSA maintained the partnership Nynäs AB in equal parts with Sweden and the United Kingdom with the firm Neste Oil, with a joint capacity of 67,000 barrels per day (bpd): Nynaeshamn and Gothenburg in Sweden, Dundee in Scotland and Eastham in England. PDVSA is studying selling its share to Neste Oil, who have been talking since 2005, consuming 90% of Venezuelan crude to convert it into specialized asphalt, lubricants and oils. This company has been working in partnership with PDVSA since 1986.

On May 12, 2020, PDVSA had sold part of its shares in Nynas AB who reported that PDVSA only had a 15% stake and the other 35% became the property of a new Swedish private foundation named Nyna whose shareholders are not identified, An Ad Hoc commission appointed in April 2019 by the National Assembly chaired by Juan Guaidó had warned on December 17, 2019 of the possible irregularities of said patrimonial loss without the due authorization. The new restructuring of the board that included 10 directors would only correspond to one director to PDVSA

North America

In February 1986, PDVSA acquired 50% of Citgo Petroleum, a company located in Dallas, Texas (United States), while in September of that year it completed the acquisition of the entire company. In September 1988, all of Champlin Petroleum, operator of a refinery in Corpus Christi, Texas, and in December 1988, 50% of the shares in a refinery in the Chicago area, thus ensuring a refining capacity that doubled that installed in the country to date, as well as the placement of half of the crude oil exported.

Southland Corporation

Many 7-Eleven locations used to have service stations with gasoline distributed by Citgo Petroleum, which in 1983 was purchased by the Southland Corporation. In 1986 Citgo (Petróleos de Venezuela SA) bought 50% of the service stations, and the remaining 50% was acquired in 1990.

• Corpus Christi refinery Corpus Christi, (Texas), 157,500 bbl
• Lake Charles refinery Lake Charles, (Luisiana), 427,800 bbl
• Lemont refinery Lemont, (Illinois), 175,940 bbl

• Merey Sweeney refinery

In 1990, the companies PDVSA and ConocoPhillips entered into a partnership with the objective of installing and managing a delayed coking unit, the Merey Sweeney Refinery in Texas, with a processing capacity of 214,000 barrels. per day.

In May 2007, President Hugo Chávez applied a decree to nationalize the oil exploration and production industry that consisted of increasing its shares from 39% to 78% of state control in business with foreign oil companies in the Oil Belt del Orinoco after failing to reach an agreement with ConocoPhillips. In 2010, a judicial arbitration process began that resulted in sentences in 2014 against and that the government appealed those sentences, by 2016 it lost the shares of the Merey Sweeney Refinery in Texas to its Conoco is obliged, for its part, to assume the debt of PDVSA, which amounts to some 195 million dollars.

In March 2019, the World Bank said that Venezuela must pay more than 8,140 million dollars to ConocoPhillips plus another 2,000 million dollars that it was awarded in a previous arbitration, the ICSID, had considered in 2013 that the takeover it was illegal when in 2007 oil and gas assets were seized from him at a rate of 5.5% annual interest.

Lyondell Refinery

In 1993, CITGO entered into a joint venture agreement with Lyondell Chemical to form the Lyondell-CITGO Refinery Company in Houston; of which Lyondell owned 58.75 percent and CITGO owned the remaining 41.25 percent. Lyondell negotiated a 25-year agreement with PDVSA to supply 240 MBD of heavy Venezuelan crude to the refinery

In August 2006, PDVSA sold CITGO's 41.25% stake in the Lyondell Refinery (Texas) to its majority shareholder with a processing capacity of 265,000 barrels per day. The refinery was valued at US $5.250 million dollars, with which CITGO's portion amounted to US $2.165 million dollars. Due to the fact that there were liabilities to settle, the net amount to be received was US$ 1,313 million dollars, which will be deposited to the FONDEN

Paulsboro Asphalt Refinery and Savannah Asphalt Refinery

In November 2007, the Venezuelan government sold the Paulsboro Asphalt Refinery (New Jersey) and the Savannah Asphalt Refinery (Georgia) to the company NuStar Asphalt Refining LLC as well as a terminal located in Wilmington. For its part, the company NuStar stated that it will disburse some 450 million dollars for the acquisition, plus an operating fund of about 100 million dollars.

Chalmette Refining LLC Refinery

In 1997 PDVSA acquired a stake in Chalmette. Continuing with the company's internationalization strategy begun in the previous decade, PDVSA acquired its stake in this refinery in 1997. The purpose of this purchase was to ensure the placement of heavy crude oil from the Cerro Negro company in the Faja del Orinoco, where PDVSA was a partner of ExxonMobil and VebaOel, thanks to the development of projects under the figure of Strategic Associations. In 2008, the problems with ExxonMobil regarding the expropriation of its assets gave rise to a dispute with the Venezuelan state. In 2015, the Chalmette Refining LLC Refinery located in Chalmette, Louisiana (USA) was sold to the company PBF Energy Inc in order to pay part of the compensation to ExxonMobil for the loss After arbitration, the sale was closed for $322 million, of which only half corresponds to Pdvsa, the other half belongs to ExxonMobil (50% - 50%), processing 185,000 B/day.

Caribbean

After the promulgation of Presidential Decree No. 1,385, the Foundation for the Research of Hydrocarbons and Petrochemicals was created, which paved the way for what is now the Center for Scientific Research and Technological Support of the national oil industry, which was established as a commercial company, a subsidiary of Petróleos de Venezuela, which allowed it to adopt policies and administrative activities aligned with the Corporation. In June 2005, Hugo Chávez led a new oil geopolitics of the Government, laying the foundations to get out of the US market in the First Energy Meeting in the city of Puerto La Cruz, founding Petrocaribe, an energy agreement in which Venezuela would finance the construction and modernization of refineries, tank farms, pipelines and hydroelectric plants in some member countries. Thus Venezuela decided to modify the supply contracts to the Citgo system that were for 10 years and reduce them to a term of 1 year, and 1 year of extension, and could get rid of them legally. it even offers part of its US refineries for sale.

Aruba

In 1991 PDVSA acquired from Chevron the deepwater terminals in the Caribbean Sea in Aruba.

In September 2015, Aruba signed a memorandum of understanding with Citgo to explore the reopening of the San Nicolás Refinery located in Aruba, stopped since 2012 by the operator Valero Energy with an installed capacity of refine 235,000 b/day. In September 2016, the Aruba parliament approved the authorization to Citgo of a 25-year lease for the San Nicolás Refinery and an investment approved by PDVSA of 685 million dollars. On May 23, 2018, the court lifted the embargo of two oil shipments to the Atlantic Lily and Grimstad tankers that ConocoPhillips requested as part of its efforts to collect an arbitration award against PDVSA. In February 2019, Citgo stopped remodeling and modernization of the project due to economic sanctions According to Prime Minister Evelyn Wever Croes "Very likely that we will not continue with Citgo but it is being evaluated how we can get out of the contract without any problem"

On June 22, 2021, the Citgo company decided to liquidate 4 subsidiary companies that were created in 2016 when the government signed a lease agreement in exchange for rehabilitating the San Nicolás Refinery to convert crude extra-heavy oil from the Orinoco oil belt in light crude. Given the problems that arose in the project delays in 2019 and thus closed its business with Aruba

Bahamas

In 1990 PDVSA acquired from Chevron the deep-water oil terminal in the Caribbean Sea, BAHAMAS OIL REFINING COMPANY INTERNATIONAL LIMITED (BORCO), in Freeport, Grand Bahamas Island., located 80 miles off the coast of Florida, with a storage capacity of 21.6 million barrels of crude oil and other derivatives, considered the fourth largest oil and product terminal in the world and the largest in the Caribbean area deep enough to receive large tankers. The Venezuelan Petroleum Corporation was reactivated in 1995 with the purpose of managing and controlling the businesses and associations that PDVSA maintains with third parties, both Venezuelan and foreign.

In 2008, PDVSA sold the Bahamas Oil Refining Company (Borco) terminal to First Reserve Corporation for around $900 million. Those resources would also have been deposited in the Fonden. This turned out to be a bad deal for PDVSA since in 2010 First Reserve Corp. sold its 80% stake in Borco to Buckeye Partners, L.P. (Buckeye), at $1.36 billion.

Bonaire

PDVSA owns the maritime terminal Bonaire Petroleum Company (Bopec terminal) with the capacity to store up to 12 million barrels of crude oil and derivatives that are strategic for exports to China and the US. In September 2010, a fire in two of its 23 warehouses forced the island's governor to close the terminal. In December 2017, the Dutch government gave PDVSA an ultimatum for lack of investment in terminal maintenance Bonaire Petroleum Company (Bopec) leaving only five of the 21 deposits on the island to operate, PDVSA had promised an investment of 25 million dollars for the maintenance and restoration of the deposits. In May 2018, the Houston-based company ConocoPhillips assumed control of Venezuela's oil assets on the Caribbean island of Bonaire. In August 2018, it reached an agreement with PDVSA for the payment of 2,040 million with an initial payment of 500 million. dollars within a period of 90 days from the moment the agreement is signed, the remaining amount will be paid quarterly in a period of four and a half years. On August 26, 2020, the government of the Island of Bonaire ordered to empty the five oil storage tanks that contain 10 million barrels due to environmental risks and lack of maintenance. In March 2021, the subsidiary Bopec declared bankruptcy because it could not pay its debts. In November a Bonaire court sentenced the payment of 41.69 million dollars for overdue debts of PDVSA

Curacao

Since 1985, PDVSA and the government of Curaçao had a lease contract for the Isla Refinery with a capacity of 335,000 barrels of crude, built by Royal Ducht Shell in 1919. By 2016, Curaçao had required PDVSA to contribute an investment of 1,500 million dollars to modernize it so that the contract could be extended, but when it does not materialize, PDVSA will be left out. In May 2018, the Commercial Court of Curaçao authorized ConocoPhillips to seize 636 million dollars in assets of the Venezuelan PDVSA.

PDVSA is facing an export crisis due to the decrease in crude oil production, possibly the Chinese company Guangdong Zhenrong will start managing this refinery at the end of 2019 it has been suffering severely from the Venezuelan crisis for more than a year. The Curaçao government is looking for a new operator to replace PDVSA and the termination of the lease appears to be the most likely. However, PDVSA managed to finalize the lease for one more year for storage use, until December 2020. On August 26, 2020, PDVSA was sued for $51 million by the Korsou oil company, owner of the Isla Refinery in Curaçao for breach of the cumulative monthly payment contract since the end of 2018 The Isla refinery has been inactive since May 2018 and PDVSA has an expired rental contract for its storage capacity of 15 million barrels in its 38 tanks and two loading docks, a 25 % of its warehouses (9 tanks) will be leased to the oil company SPS Drilling E&P, PDVSA has been vacating part of its stored oil after the sanctions in 2020, while its owner Korsou is looking for a new operator The company Korsou plans to auction PDVSA's stored oil to settle some labor debts that he left pending On August 30, it was determined that Pdvsa is obliged to pay Curaçao a debt in arrears for the rent of the Isla Refinery, after losing the appeal in which it agreed to pay 20 million dollars a year in rent for damages upon rescinding the contract and accumulated months of rent, part of that debt was collected directly by RdK, against the stocks of crude oil and finished products, which were stored in the Bullenbaai terminal.

A court in Curaçao authorized the sale of shares of the PDVSA subsidiary: Propernyn, which manages the shares of Nynas to cover the unpaid debt to the Korsou company of 52 million dollars, while ConocoPhillips also enters awaiting the liquidation of shares who has won a lawsuit for 10,000 million dollars

Cuba

In December 2007, Hugo Chávez, at the Petrocaribe summit in Cienfuegos (Cuba), wanted to make a large investment in the reactivation of the Camilo Cienfuegos refinery, paralyzed since its construction in 1989, abandoned after the crisis that collapsed the government Soviet, with an installed capacity of 65,000 barrels per day, the estimated project was US $5.4 billion to expand the refining capacity to 165,000 barrels. of oil per day, the start-up of a supertanker base in Matanzas and the reactivation of the oil pipeline between Matanzas and Cienfuegos. At 165,000 barrels per day, the new refinery in Matanzas, in the north of Cuba, will process 150,000 barrels per day, and the expansion of the Santiago refinery (in the southeast of Cuba) will increase to 50,000 barrels per day. barrel of oil prevents investment. In 2016, the Camilo Cienfuegos refinery announced the closure of 120 days for maintenance, although the reality is due to a 19.5% reduction in oil shipments from Venezuela. By December 2017, official reports report that some 24,000 are being refined barrels per day, instead of the 65,000 barrels for which it was designed, on December 14, 2017 in a statement Cuba announced the decision to take possession of the Camilo Cienfuegos refinery, with this Cuba seeks to collect debts due to the breach of commitments by part of Venezuela.

U.S. Virgin Islands

In 1998 Hovensa, a joint venture between Hess Corporation and Petróleos de Venezuela (50% and 50%), took over the St. Croix refinery located on the island of St. Croix in the US Virgin Islands was among the 10 largest refineries in the world, it had a capacity of 500,000 barrels per day. In January 2011, Hovensa paid a fine of $5.3 million for violations of the Clean Air Act, in January 2012 it announced its closure after accumulating losses of $1.3 billion in the last three years.

Jamaica

On August 14, 2006, PDV Caribe SA signed an agreement with Petroleum Corporation of Jamaica, in Jamaica where they agreed to refurbish the Petrojam refinery, in order to increase its processing capacity from 27,000 barrels per day to 50,000 barrels per day. A year later, in August 2007, PDV Caribe SA would share shares in the Petrojam Mixed Company. with 49% of the shares, through an agreement signed by Asdrúbal Chávez, Vice President of Refining.

In February 2018, Jamaica reportedly notified Venezuela of its intention to buy the 49% that Petróleos de Venezuela, S.A. (PDVSA) has from Petrojam with effect from February 22, the refinery located in the Caribbean nation. Some estimates would value that percentage at approximately $80 million. In January 2019, Jamaica evaluated the purchase of the 49% owned by PDVSA of the Petrojam refinery. On June 17, 2019, in a forfeiture action, Jamaica takes full control of the Petrojam Refinery, Prime Minister Andrew Holness said: that without the introduction of improvements, Petrojam would lose customers and cease to be profitable, in addition to the risk of sanctions that is applying USA

Dominican Republic (Santo Domingo)

In May 2010, due to a debt of US 135 million that the Dominican Republic had with Venezuela for the purchase of crude oil, the government offered it the purchase of 49% of the shares of the company Refidomsa and that was specified by the value of US $ 133.43 million according to the purchase-sale contract and through Petrocaribe.

Built in 1973 and owned by Royal Dutch Shell until the end of 2008, sold to the DR for a value of US $110 million. The Dominican Republic retained 51% of the shares, it has a capacity of 35,000 B/day. In February 2015, Dominican businessmen showed interest in buying the shares of PDVSA. In October 2015, the RD offered to buy part of the shares of PDVSA. In March 2019, the Dominican Republic denied that it was negotiating the shares owned of PDV Caribe with people from the Venezuelan opposition In addition to a problem that has arisen, they accuse them of wanting to pay 700 million for the shares plus a debt to Venezuela of 240 million for the delivery of crude, Félix Jiménez has responded that they owe nothing and that the sale of shares had been proposed in Mexico with Maduro for 200 million. Pdvsa currently lost control due to economic and operational difficulties, which deepened with the sanctions in said refinery. For now, the purchase of shares has remained in limbo because the DR government does not recognize Nicolás Maduro as president.

On August 20, 2021, the Venezuelan government lost by selling 49% of the shares owned by it for a value of 88 million 134 thousand dollars to the Dominican Republic, according to the declarations of the Minister of Finance of the Dominican Republic, José M. Vicente, they previously contacted OFAC which did not object, after more than three years of trying Venezuela lost 45 million according to the figures offered from the purchase to cover a debt of PDVSA and government bonds.

Saint Eustatius

PDVSA has leased the Statia terminal operated by NuStar Energy on the neighboring island of Saint Eustatius. The state company now pays around 2.3 million dollars per month to lease warehouses with a storage capacity of 5 million barrels of crude without considering additional charges, "according to a document seen by Reuters”. It also owns six deep-water berths and facilities for mixing and shipping and transhipment.

Columbia

The company Monómeros Colombo-Venezolano (SA) founded in 1967 with the initial participation of the Industrial Development Institute, IFI, the Colombian Petroleum Company, ECOPETROL and the Venezuelan Petrochemical Institute (IVP), which has the Libertador Simón Bolívar Petrochemical Complex located in Barranquilla and the Antonio Nariño Petrochemical Complex located in the city of Buenaventura, Colombia.

Monómeros Colombo-Venezolano (SA) provides and markets the following products: complex granulated fertilizers, animal feed a concentrated source of phosphorus, calcium and sodium sulfur, as well as industrial products: caustic soda, phosphoric acid, ammonia, cyclohexanone (caprolactam), Meko, Sodium Sulfate

On April 18, 2006, the Colombian Petroleum Company, ECOPETROL and the Industrial Development Institute (IFI), sold their shareholding to the Venezuelan partner Petroquímica de Venezuela S.A., Pequiven. They have the capacity to meet the demand for fertilizers, calcium phosphates for animal feed, and chemical products. On December 21, 2006, Pequiven bought the shares from the Dutch firm Koninklijke DSM. With this last transaction, Pequiven's entire participation is 100% of the capital. Monomeros Colombo Venezolanos produces 30,000 metric tons of caprolactam per year, used for the clothing, netting, auto parts, and industrial plastics industries. The subsidiaries of Monómeros are Vanylon (Barranquilla), Ecofértil (Buenaventura), Monómeros International (Virgin Islands) and Compass Rose Shipping (Bahamas).

In February 2012, the Vanylon textile yarn factory (Barranquilla) founded in 1960, which produced nylon and polyester, closed permanently. It had been a year since it stopped receiving the 8 mt per day of caprolactam, the raw material required to manufacture nylon.

On May 23, 2019, the president of the National Assembly takes control of the company and appoints new members of the board of directors to unblock the sanctions that the representatives of the Venezuelan regime receive.

On November 29, a preliminary report discovered that the company granted monthly 320,000 dollars for the rental of aircraft for uses other than their functions, another irregular situation was the contracting of services without the bidding, rental and sale of property of irregularly and without any kind of control

During the month of April 2021, the administration of Juan Guaidó signed a contract with the Panamanian company Lion Street for 15 years to maintain the management of the operations of Monómeros Colombo-Venezolano SA

The new socialist geopolitics

With the arrival in the government of Hugo Chávez in 1999, there was a turn contrary to what Venezuela had been developing in terms of its global expansion, looking for a new alternative to get out of the North American market, looking for new markets such as Russia and China and be more equitable in terms of distribution in the Caribbean and South America. Petrocaribe is created and new laws are passed for PDVSA to acquire a majority shareholding in oil and gas exploration and exploitation companies in the country. In 2007, the change in the development of the "Socialism of the XXI century" seeking the creation of new poles of power trying to cause the weakening of the US empire and building alliances to bring together regional leftist forces shared with political ideals with Iran, Syria, Belarus and Russia, while with China, India, Vietnam and Malaysia seeks to share a relationship scientific, economic and technological, later it would do it with Turkey and Uganda for the trade and management of gold.

Caracas Energy Agreement

In October 2000, Venezuela signed an agreement for the sale of oil under very soft conditions to ten countries in Central America and the Caribbean with the intention of gaining new markets.

Petrocaribe

International organization founded at the initiative of the Venezuelan government in 2005, currently made up of 16 member countries. Where Venezuela is the largest supplier of oil, gas and its derivatives at preferential prices, it is also the major financier for the rescue of refineries, pipelines and terminals.

It is an agreement to supply Venezuelan oil with financing for up to 15 years, a one-year grace period and an interest rate of 2% for the financed portion of the bill, which varies by country. This agreement will work parallel to that of San José, through which Caracas and Mexico supply 160,000 barrels of oil per day to this region. The Caracas Agreement plans to supply the Dominican Republic with 20,000 barrels per day, Guatemala 10,000, Costa Rica and El Salvador 8,000; to Jamaica 7400; to Haiti 6,500; to Honduras 5,000; to Nicaragua 4,900; and Belize 600. These are bilateral agreements.

The problems of PDVSA due to the drop in production have brought serious consequences since 2017 to the different member countries of Petrocaribe, leading them to an energy crisis, others to seek new partners or crude suppliers.

PDVSA's debt growth

PDVSA has used the bond mechanism to obtain liquidity, before 1998 the country had an external debt of about 28,000 million dollars of which 5,000 million was PDVSA's debt, however by 2020 the PDVSA bond debt had grown to 64,700 million almost 23 times, for the year 2020 Delcy Rodríguez declared that the debt amounts to 65,507 million dollars whose payments were suspended in 2018

Fonden

It is a company created in July 2005, to deposit a part of the extraordinary income from oil sales to be used for social and housing programs, which would be administered by the executive branch. It has been criticized for the way in which the funds of this institution were used, without any type of comptrollership, between 2005 and 2016 according to reports with the reports and accounts of the Ministries of Oil and Finance, this institution managed approximately 82 billion of dollars, being the most significant year 2012 when PDVSA delivered 15,572 million dollars, this account was also depositary of the sales of Citgo refineries between 2007 and 2008

The revenues of the industry were so significant that Chávez ordered the creation of a state-owned company, attached to the Ministry of Finance, to which Pdvsa had to divert much of the currency obtained by his exports. The National Development Fund (Fonden), used by the president as a parallel and non-contrary budget, received from industry $82,210 million between 2005 and 2016, according to the memories and accounts of the ministries of Oil and Finance

Sales policy for refineries abroad

Using a simple criterion of not being profitable, the government sold, between 2003 and 2015, shares and participations in fifteen refineries abroad with the promise of installing new refineries, as well as the sale of oil pipeline terminals, large storage centers and small service station centers (gasoline pumps). The country lost its great refining capacity and social damage by eliminating many sources of work for Venezuelan personnel, technicians and professionals.

National Production

According to OPEC, the country had an average annual production for export. Venezuela produces light oil in the Zulia basin and mostly heavy and extra-heavy oil in the Orinoco belt basin. This product is treated to be improved with lighter oil, with which better quality diesel is obtained, known by the name Merey 16 and another by the name Hamaca (known as muddy crude), which are the most in demand, but Due to their high sulfur content, according to the standards of the International Maritime Organization (IMO), they are qualified with the acronym HFSO, while products with low sulfur content are classified as: LSFO

On May 28, 2019, after five years, the Central Bank of Venezuela issued an official report stating that oil exports fell from 2013 to 2018, as recognized by the BCV, from 66,503 million dollars in 2013, to 29,810 million in 2018, a drop of 55.17%, which shows the extremely serious situation of the oil sector in this period Francisco Monaldi, economist and professor at Rice University's Baker Institute, said: " The current state of the crisis that Venezuela is experiencing and its state-owned company Petróleos de Venezuela (PDVSA) is a catastrophe" PDVSA's production went from 2,897,000 b/d in the year 2000 to only 768,000 b/d in April 2019 and that a strong investment would be needed to recover production. Total exports of crude oil and refined products by state-owned Petróleos de Venezuela (PDVSA) and its joint ventures fell to around 770,000 barrels per day (bpd) in August, from 992,565 bpd in July and 1.13 million bpd in June. According to the revised data, its main destinations are China, Europe through Rosneft and a third Cuba, the withdrawal of its buyer India, avoiding the application of sanctions to it, as well as Chinese allies National Petroleum Corp (CNPC) that canceled loads scheduled for August. For June, PDVSA increased its production by 6.5%, reaching an average of 631,900 barrels of oil. In March 2022, production has been recovering very slowly since July 2020. For an average production of 644,419 according to internal data from PDVSA. Venezuela had begun exporting 500,000 barrels of Hamaca crude to the town of Sweeny, in Texas, USA, negotiated by Chevron. In July 2022, it sent 430,000 barrels and in November 152,000 barrels to Spain.

Oil Sales

Oil exports are the main source of the country's foreign currency income, on which between 70% and 95% of the trade balance has depended in the last 50 years. Venezuela achieved annual income according to its exports, data provided by the Central Bank of Venezuela.

• 1981 US$ 19,000 million
• 1983 US $12 billion

• 2000 US$ 27,874 million
• 2001 US$ 21,745 million
• 2002 US$ 21,532 million
• 2003 US$ 22.029 million
• 2004 US$ 32.871 million
• 2005 US$ 48,143 million
• 2006 US$ 57,972 million
• 2007 US$ 62,947 million
• 2008 Home oil boom - millions of dollars
• 2008 US$ 89,035 million
• 2009 US$ 54,178 million
• 2010 US$ 62,317 million
• 2011 US$ 88.131 million
• 2012 US$ 93,566 million
• 2013 US$ 66,503 million
• 2014 US$ 71,732 million
• 2015 US$ 35,136 million
• 2016 US. $ 25,942 million
• 2017 US$ 31,497 million
• 2018 US$ 29,810 million
• 2019 US$ 7 billion
• 2020 Estimated $4.2 billion
• US$ 7,935 million
• US$ 10,384 million (as estimated in January 2023 OPEC report)
• 2022 Estimated to October 12.3 billion
• US$ 19,241 million (as estimated in January 2022 OPEC report)

Barrel prices

The price of a barrel of oil varies daily

Products and derivatives

Import of gasoline and diluents

Venezuela has been importing gasoline more frequently after the accident that occurred at the Amuay Refinery in 2012. After February 2019, the import of diluents and gasoline has been decreasing due to the sanctions applied by the United States against the government of Venezuela had been importing 200,000 Barrels per day, currently in 2019 it has been importing 135,000 B/Day.

PDVSA Gas, New Sparta State.

When PDVSA lost the St. Croix refinery located in the United States Virgin Islands in 2012, it not only lost its heavy and extra-heavy crude in international markets, it also lost the supply of additives since that the Virgin Islands refinery had begun to supply the components used in the manufacture of gasoline that had stopped being produced in Venezuela due to problems in internal facilities.

On June 6, 2019, the United States Treasury expanded sanctions, clarifying that exports of diluents to Venezuela could be subject to sanctions Office of Foreign Assets Control (OFAC), modified three General Licenses that authorized "certain activities" of PDV Holding Inc related to the export and trade of diluents

Social programs and activity plan

During 2004 and 2005, other types of changes took place in the company, orienting it as a promoter of social and educational programs for the Venezuelan population. In this sense, PDVSA now directly supports the activities carried out by the Venezuelan government to improve the living conditions of the population. There is, however, strong criticism of the recent activities of the industry and its handling of the global energy scene (creation of Petrocaribe and PetroSur, rough diplomatic relations with the United States and use of oil as a political and negotiation instrument by of the Venezuelan government).

Despite this, PDVSA published in August 2005 its "Activities Plan 2005 - 2010", in which a very ambitious growth project is proposed in all work and business schemes: Certification of oil reserves, obtaining a higher production quota within the Organization of Petroleum Exporting Countries (OPEC), increased production of light and heavy crude oil, construction of refineries inside and outside of Venezuela, energy interconnection in Latin America and the Caribbean, entry into new fuel markets (Asia).

In May 2009, the government promulgated a law for the oil company to assume control of 39 companies that provide services to the company since, according to the legislation, the State reserves all rights over the goods and services of the activity hydrocarbon primary.

In October 2016, Corporación A.C. SERMED R.L signs agreements with the Estadal CINECAFAL belonging to the Falcon State Governorate and created by Decree on June 7 of the same year, to act as the Marketing Corporation of the products assigned to it by the Venezuelan State, one of the main objectives is to carry out agreements with international private sector companies for the commercial exchange of food, medicines, medical equipment and others, for oil derivatives.

Sanctions by the United States and other countries

On August 28, 2017, US President Donald Trump prohibited his country from transacting with debt securities and shares issued by the Venezuelan government and its state oil company PDVSA, as well as transactions with certain existing bonds belonging to the public sector Venezuelan, as well as dividend payments to the government of Nicolás Maduro. It should be remembered that in October 2016 the government mortgaged 50.1% of Citgo to PDVSA2017 bondholders for a value of 3,367 million dollars and in December 2016 it gave guarantee the other 49.9% for a loan to the Russian government, which covered 100% of the value, which would avoid fraud scandals for new lenders. In addition, the ignorance of the new Venezuelan government of Nicolás Maduro, the blockade of the functions of the National Assembly, the creation of a constituent National Assembly without the application of the democratic mechanism, the dismissal of the Prosecutor of the Nation are some of the causes of these sanctions..

On January 5, 2018, the government prints the 100 million cryptocurrency the petro and on January 16, the United States Treasury Department warned US investors that using the petro could cause them legal problems. The United States Department of the Treasury reported on February 13, 2018 that, within the framework of the financial sanctions imposed against the Venezuelan State, North American contractors who wish to do business with the state oil company will not be able to collect debts with more than 90 days old without a "special specific license." PDVSA to 2020. The lack of knowledge on the part of the Lima Group, the OAS and the US of the 2018 presidential elections held in May lead to more sanctions against figures from the Venezuelan administration and institutions subordinate to the new regime.

On February 17, 2019, the Russian bank Gazprombank blocked PDVSA accounts in Russia. On March 7, 2019, PDVSA announced a state of emergency after the Return of PDVSA oil tankers. The gasoline shortage in Venezuela worsens, long lines are made by Venezuelans to fill the tanks of their vehicles.

On August 5, 2019, the President of the United States signed an executive order authorizing sanctions against anyone who supports Maduro, decrees a total economic blockade with exceptions Trump's words:

"I have determined that it is necessary to block the properties of the Government of Venezuela in the light of the continued usurpation of power by the illegitimate regime of Nicolás Maduro"

On August 16, PetroChina rejects the purchase of Venezuelan oil with which Venezuela is left without its two strong allies China and India in the purchase of oil. On September 3, the Chinese oil company CNPC, one of the main partners of Petróleos de Venezuela (PDVSA), paralyzed its local activities with PDVSA so as not to violate the sanctions imposed by the United States government whose license expired on September 4. Likewise, the subsidiary company Ingeniería HQC (HuanQiu Contracting & Engineering Corporation) and participant of 40% of the share capital of Sinovensa, suspended all its operations due to overdue debts in 2018 that exceeded 50 million dollars this company was in charge of carrying out the expansion of the refining capacity of extra-heavy crude from 105,000 to 165,000 bpd to be able to mix them with light hydrocarbons and thus obtain cashew crude.

Litigation with Crystallex

After 2002, President Chávez granted the concession to the Canadian company Crystallex for the Las Cristinas gold mine. In June 2007, Crystallex announced that it would start operations to extract gold in Las Cristinas, Sifontes municipality, in Bolívar state. In April 2008, the Ministry of the Environment and Natural Resources denied Crystallex the start of operations, alleging that it needed to obtain permits. environmental. On November 5, 2008, the Government announced that it would nationalize the "Las Cristinas" gold mine. Later, in January 2009, the nationalization began, alleging: "These minerals are for Venezuelans, not for transnationals". In a speech before the National Assembly, Chávez announced the seizure of the deposits and their transfer to a cooperative created with Russia.

In February 2011, Crystallex filed before the International Center for Settlement of Investment Disputes (ICSID), a request for arbitration against Venezuela for 3.8 billion dollars. Thus began a tortuous arbitration process. CITGO constitutes the main asset of PDVSA outside the national territory

On April 5, 2016, the ICSID arbitration panel ruled in favor of Crystallex and ordered Venezuela to pay US$1.386 million in damages due to unfair and inequitable treatment and illegal expropriation of the project miner Las Cristinas. The Venezuelan government refused to pay and appealed the sentence given by the court risking the embargo.

Foreclosure Order

On August 6, 2018, United States (USA) federal judge Leonard P. Stark of the Delaware Court authorized the seizure of the company located on United States soil, Citgo Petroleum Corporation, property of Petróleos de Venezuela, S.A. (PDVSA), to comply with pending debts from the national government to the Canadian company, Cristallex International Corporation, for mining rights lost in Venezuelan territory. On August 26, the federal judge ruled that the shares of the parent company of Citgo Petroleum Corp. in the United States, unless Venezuela issues a bond in compensation. The judicial rapporteur said that if Venezuela wants to hold on to PDVH, a subsidiary of the state oil company, during a continuing appeals process, it will have to put up a bond. It is unclear whether Venezuela, or any of its entities, will be able to afford the funds, because the country is already in widespread default on $6 billion in debt and has resorted to paying creditors by other means, including giving away bonds it has kept in reserve, reports The Wall Street Journal.

In such cases, the amount of the bond is the award plus interest, and is a means of insuring plaintiffs against the possibility that there will be no money left to pay a judgment once the appeals process is complete. However, federal judges have the discretion to reduce that amount.

On July 29, 2019, a United States Court of Appeals ruled that Crystallex International Corp. could seize CITGO shares for a debt of $1,386 million.

On October 1, Crystalex International Corp obtains authorization to seize the shares of the state refinery Citgo. The government of Nicolás Maduro has done nothing to cancel the debt of 1,386 million dollars for the expropriation of assets. While interim president Juan Guaidó seeks a way not to lose such an important national asset before the UN and the US government, on the other hand, in 2020 the PDVSA2020 bonds will expire, as well as the loan to the Russian company Rosneft that add up to about $3 billion plus interest.

On February 19, 2020, the attorney for the interim government of Juan Guaidó requested an appeal to consider the ruling in the Court of Appeals for the Third Circuit, which was rejected on April 18 by not reviewing the case and being returned to resume the litigation that CITGO has pending, however CITGO maintains a protection order from the Department of the Treasury of In February 2021 Venezuela filed an appeal against the decision of a federal judge that gave the pass to the sale of the assets of CITGO to comply with a debt of 1.4 billion dollars. In October 2022, the Federal Court of the United States delivered a schedule to carry out the auction of the sale of shares of the state-owned company CITGO by the end of 2023, to cover the demand from the Canadian company Crystallex for a value of 970 million dollars, which was nationalized in 2008 after failing to reach an agreement with the government of Hugo Chávez. Likewise, ConocoPhillips would be behind, which has a debt of 1,290 million dollars and Koch Minerals with a debt of 387 million dollars.

Litigation with ConocoPhillips

On May 1, 2007, President Hugo Chávez applied a decree to nationalize the oil industry that consisted of increasing from 39% to 78% state control in business with foreign oil companies in the Orinoco Oil Belt, took the facilities of four heavy crude upgrader refineries in the Orinoco Oil Belt valued at 30,000 million dollars, one of which was operated by the oil company ConocoPhilips, AMERIVEN (today Petropiar) and another the Petrozuata project, as well as the La Ceiba currently under development near Lake Maracaibo, in western Venezuela, after reaching an initial agreement with ConocoPhillips, on June 26 this company did not accept the terms of the restructuring agreement. Therefore, the government withdrew the concession to the oil company.

In 2010 an arbitration process began before the International Chamber of Commerce (ICC ). The verdict of the Federal Court of New York with sentences in 2014 against PDVSA. The government stated that it will appeal said sentences, by 2016 the Merey Sweeney Refinery in Texas loses, while Conoco is obliged, for its part, to assume the debt of PDVSA, which amounts to some 195 million dollars

On April 25, 2018, ConocoPhillips with headquarters in Houston wins a lawsuit for 2,040 million dollars before the ICC against PDVSA that was issued by an international court formed under the rules of the Chamber of International Trade for which ConocoPhillips directs embargoes against terminals, warehouses, tankers, refineries and any other asset of the PDVSA company

In May 2018, the Curaçao Court authorized ConocoPhillips to seize 636 million dollars in assets of the Venezuelan PDVSA.

On May 23, 2018, the Court of First Instance of Aruba lifted the seizure of two oil shipments from the Atlantic Lily and Grimstad tankers that ConocoPhillips requested in April of that year as part of its efforts to collect an arbitration award against PDVSA (for the value of 2,040 million dollars), containing some 800,000 barrels of crude oil and gasoline for domestic use, this situation is affecting the local economies of the island.

On August 18, 2018, ConocoPhillips reached an agreement with PDVSA for an initial disbursement of close to 500 million dollars within a period of 90 days from the moment of signing the agreement, the remaining amount will be paid quarterly in a period of four and a half years, thus allowing the local economy of the Caribbean islands to flow.

In March 2019, the World Bank says that Venezuela must pay more than 8.140 million dollars to ConocoPhillips plus another 2.040 million dollars that it was awarded in a previous arbitration, the ICSID, had considered in 2013 why the taking of Possession was made illegal when oil and gas assets were seized in 2007 at a rate of 5.5% annual interest.

Litigation with ExxonMobil

In 1977, PDVSA evaluated the Orinoco Oil Belt, which measures 450 kilometers from East to West and up to 40 km from North to South. The field has six main areas defined as volumes of hydrocarbons, with the Cerro Negro area at the eastern end. where ExxonMobil operated. In 2005 the Ministry of Energy and Petroleum reinstituted without any change the evaluation area marked fortuitously 30 years ago.

On May 1, 2007, President Hugo Chávez applied a decree to nationalize the oil industry that consisted of increasing from 39% to 78% state control in business with foreign oil companies in the Orinoco Oil Belt. The Venezuelan government proposed to this company the payment of its shares recognizing only the value of the accounting books up to that date, the company did not accept since it aspired to be paid the value of the entire business that included the investments and the profits that it would leave receive until the end of the contract. They did not reach an agreement that ExxonMobil rejected, the company sued in three international judicial courts to request the precautionary freezing of all PDVSA funds abroad for up to 12,000 million dollars, which it considered a breach of the agreement.

On October 9, 2014, ICSID ruled that Venezuela had to pay a total of $1.6 billion to ExxonMobil for the nationalization of Cerro Negro, Monagas state.

In June 2015, Exxon Mobil Corp and PDVSA sold their Chalmette Refining LLC Refinery located in Chalmette, Louisiana (United States), to the company PBF Energy, in order to pay part of the compensation to ExxonMobil for the loss of arbitration, the sale was closed for $322 million, of which only half corresponds to Pdvsa, the other half belongs to ExxonMobil (50% - 50%)

In March 2017, ICSID changed the judgment in favor of Venezuela and reduced the payment for damages to Exxon from $1,600 to $188 million

Litigation with Owens-Illinois

In October 2010, Owens-Illinois Venezuela C.A was expropriated by the government of President Hugo Chávez. The company had been working in two plants as it was the largest manufacturer in the country of containers for food, beverages, medicines, and cosmetics. It is qualified as the largest producer of containers in the world since 2004, the company employs more than 1,000 people in Carabobo and had been working in the country for 50 uninterrupted years.

On February 14, 2019, Owens-Illinois sued Venezuela and Petróleos de Venezuela for $500 million for their two expropriated plants, a manufacturer of different glass containers, in a US District Court of Delaware. On May 21, a US court confirms the arbitration ruling in favor of Owens-Illinois in a case against Venezuela for 372.5 million dollars plus interest and comes against Citgo, the delegation of President Guaido requested a 120-day postponement while a transition to democracy of the sentence, which was denied.

2020 oil crisis in Venezuela

Since 2015, PDVSA's oil and refining production has been declining, to the point that it collapsed in May 2020. During the first months of this year, the distribution of gasoline for public transportation, heavy cargo, and artisanal fishing in the national territory was affected by problems of low oil production and by the lack of maintenance of its refineries. In April, the government made an agreement with Iran to import gasoline in view of the crisis that Venezuelan refineries have been going through since 2019, as well as the low number of exploration drilling rigs to keep the refineries active, Five oil tankers began to arrive from Iran on May 25 with approximately 1.5 million barrels of gasoline for a domestic market that consumes between 60 and 80,000 barrels per day. Venezuela has gone from being an oil exporter to an importer of oil from Iran. By June 2020, oil production fell to almost the minimum for different reasons according to oil experts such as Carlos Mendoza Potellá (BCV advisor), Luis Oliveros and José Toro Hardy, the lack of investment in the exploration and maintenance of the refineries together with the economic sanctions of the US government against the company PDVSA aimed at ending the adm The administration of Nicolás Maduro, have paralyzed the extraction of oil due to the saturation of storage tanks, as well as mismanagement and corruption.

Company division and structure

One of the factories at the service of PDVSA.

PDVSA is divided into four work units, according to the functions performed by each one:

• Exploration and Production: Area responsible for the assessment, exploration, certification and drilling of oil deposits. Being the first link in the chain, it also covers the drilling and construction of the oil wells.

• Refination: Area responsible for the separation, improvement and acquisition of petroleum products or derivatives through processing plants and refineries.

• Distribution and marketing: Area in charge of placing the products obtained (crude) in the different international markets, and (derivated) in national and international markets.

• Gas: With reserves tested by 147 billion cubic feet, Venezuela is one of the world's world powers in the gaseous hydrocarbons sector.

EXPLORATION AND PRODUCTION SECTOR - Oil Belt, wells and Companies

Venezuela has been divided into five large and important oil basins where more than 50 associations and mixed companies are distributed for oil exploration, drilling and production

• Cuenca Zulia-Falcon is the most important because it concentrates the largest area of light oils and the largest volume of production is located in the north-eastern part of Venezuela.
• Cuenca Barinas-Apure is located in the south-west of Venezuela.
• Cuenca oriental is the second most important basin for the reserve that contains where the Orinoco Oil Strip is located with an immense potential of hydrocarbons.
• Tuy-Cariaco Basin is located in the northern part of the eastern basin.
• Cuenca Costa Outside is characterized by being important in gas reserves it includes the area of the Gulf of Paria and the Deltana Platform.

PDVSA - Structure: operating DIVISIONS and their companies of Exploration Agreements at Risk

PDVSA - drilling rigs

The oil sector depends on the production of its oil wells and to maintain said production, new wells have to be drilled with the help of drills that are worth tens of millions of dollars, it turns out that the low budget for maintenance has This has caused the service companies that supply this equipment to gradually decrease the use of these drills and oil production has decreased in the last five years. Another important factor is the lack of investor confidence due to the lack of liquidity for payments by PDVSA and subcontracting companies.

According to OPEC, 70 rigs were operating in 2010, while in 2011 there were 122 rigs in operation.

In 2018, the average number was 27 active drills, thus the year 2019 began with 27 drills, in March it went to 22 and in July it recovered to 25, thus it remained until December 2019, of which 23 are oil and two gas

According to the last May report from OPEC in April 2020, oil production fell to 620,000 barrels per day and one of the reasons for the low production is due to the fact that only 14 drills are active, adds that at the end of the 90s, Venezuela had more than 180 drills According to information from the Baker Hughes firm, the number of operational drills in May 2020 were two and for the month of June there is only one, this is one of the causes of the collapse of national production

This drop in the number of drills has been a universal problem since the start of the COVID-19 pandemic and the consequence of low prices in March 2020, countries such as Brazil, Colombia, Argentina and the US itself have had to disable part of their drills according to Baker Hughes data.

By March 2022, with a report from OPEC, the drilling platforms indicated an increase to 26 drills in activity. In October 2022, the existence of only three operating drilling platforms was described. In February 2023, Pdvsa resumed the operation of a drill in the Orinoco oil belt by the petromonagas company that is currently 100% owned by Venezuela, after it reported having three drills operating in 2022 compared to 2010 when 70 drills operated.

REFINING SECTOR - Refinery Assets - Improver Assets

As of August 2019, Venezuela has the ownership of six national refineries and three refineries in the United States under the administration of CITGO, there are others in the Caribbean that are not active or are in a lease situation soon to expire, it has four upgrading plants for extra-heavy crude oil and a Merey crude oil plant, as well as warehouses, pipelines and service centers (in 1999 Venezuela had equity shares in twenty-five refineries and an average daily production of 3 million barrels that provided work for many specialized Venezuelans)

All of these refining plants and upgrading plants require an annual stoppage to perform preventive plant maintenance that lasts between 15 and 25 days, which mostly occurs during the first weeks of the beginning of the year. This period is called the Great Parade .

The first refinery in Venezuela was built in 1917 by the Caribbean Petroleum Company, which began processing 8,000 B/day, ceased operations in 1982.

Since 2012 the refinery plants have suffered from a lack of maintenance, which has caused them to be working at 10% of their capacity in 2019 and at the beginning of 2020 the Amuay refinery was paralyzed and the Cardón refinery

National Refining

In 1998, Petróleos de Venezuela became the third largest company in the world in refining capacity, capable of processing 3.3 million barrels of oil per day. In those years, it managed 24 refineries around the world, 18 of them abroad and 6 in the country. For 2019, it only manages 11 refineries, 6 in the country, 3 in the United States, and 2 in the Caribbean islands.

Production has been reduced in the last fifteen years. After the application of a new oil geopolitics that the government of the day laid the foundations to get out of the US market, the reduction of its investments abroad starting in 2006 and the dismissal of more than 15,000 workers, including professionals and technicians. in February 2003. Oil production began its decline as of 2009, settling at 2,400,000 b/day, which remained until 2014 between ups and downs. As of 2017, the drop in production was greater. In May 2019, OPEC reported that national oil production was at 750,000 B/day. In the September 2019 report, the monthly average fell to 680,000 B/day. According to OPEC data, the average production for the month of February 2021 was 521,000 barrels per day.

The company's executives have been accused of clientelism, corruption and incompetence, which would have given rise to an allegedly ineffective and troubled management. Between August 2017 and May 2018, the United States government sanctioned PDVSA, for reasons of corruption and money laundering of high officials and prohibited US companies from carrying out transactions with the company. In 2018, the United States became an oil exporter, thanks to the new extraction technology, Hydraulic Fracturing (Fracking). In a report presented to the country in May 2019, the BCV detailed the drop in production in the last five years, demonstrating the reality of an oil crisis.

PDV America Refining - CITGO

Among its largest international assets is the company Citgo, in the United States of America, of which it owns 100%

Until 2006, the state owned -through Citgo- eight refineries in the United States (currently in 2019 it only owns three refineries), the one in Corpus Christi, in Houston, in Illinois, in New Jersey, in Sweeny, in Louisiana, and Savannah, in Georgia. Refining capacity on US soil is approximately 1.12 million barrels per day. There are 608,000 barrels per day produced by the refineries located in the Caribbean. In August 2009, PDVSA acquired 20% of its shares with the Canadian company, Enbridge, being the largest subsidiary company along with Citgo.

In May 2010, PDVSA also acquired 49% of the only refinery in the Dominican Republic, known as Refidomsa, for $133.4 million.

Pod Europe Refining

In Europe, the capacity it had exceeded 252,000 barrels per day -through the subsidiary company Nynäs- with the Nynasshamn refineries and the Gothenburg Refinery in Sweden and Antwerp in Belgium, as well as those located in the United Kingdom. OFAC extends until October 25, 2019 to Nynas AB, a subsidiary of PDVSA (which maintains 50% of its shares) for payment to suppliers, referring to the blockade of people or companies that contribute to the deteriorating situation in Venezuela. After 2011 PDVSA only refines an average of 29,000 b/d, the Russian company Rosneft buys Venezuelan crude oil for its refineries.

Ruhr Oil in Germany, of which he owns a 50% stake (in 2010, Chávez sold PDVSA's shares in Rühr Oel to the Russian company Rosneft, which included portions in the German refineries in Gelsenkirchen, Neustadt, Karlsruhe and Schwedt, as well as the petrochemical plant DHC Solvent Chemie GmbH, also in Germany) and the company Nynäs Petroleum in Sweden, in which it has a 50-50 stake with the Finnish oil company, Neste Oil Corporation. In 2010 Petróleos de Venezuela agreed with its strategic partner Russia on the sale of its shares in the German Ruhr Oel refineries, in which it is associated with the British BP, Ruhr Oel, which has a capacity of 1.04 million b /d of processing in its four refineries, PDVSA owns 50% of the Gelsenkirchen refinery, 19% of the Schwedt refinery, 13% of the Neustadt refinery and 12% of the Karlsruhe refinery; participations that report a consumption of 240,000 b/d. 20% Venezuelan crude

In May 2020, the government of Nicolás Maduro sold 35% of the shares of the Nynas company, keeping 15% and omitting the consultation and approval of the Venezuelan parliament to separate it from the sanctions of the US government. On April 6, the publisher Albert News exposed documents of the sale of Nynas AB to the owner, an Iranian-German citizen Bernd Reza Schmidt who lives in a hotel in Caracas. owner of a briefcase company, holder of 49% of the share capital carried out without the approval of the National Assembly and not as an unidentified Swedish foundation was made to see at the time valued in total assets according to the 2019 financial report at 1,442 million of dollars.

POV Refining Projects

Extra-heavy oil crude upgrader plant

In the year 2000 Venezuela began the addition, in the Jose Complex, of four extra-heavy crude upgrader plants, which allow a better commercial performance of the petroleum product, in the improvement Elements such as coke, sulfur and other solid elements that are very toxic are extracted from extra-heavy crude, which in large quantities are accumulated in yards for their next export, since the internal market is very small for these by-products. They are managed by foreign oil companies. On May 1, 2007, the Government seized the facilities of the four heavy crude upgrader refineries in the Orinoco Oil Belt valued at 30,000 million dollars.

Venezuela currently has five plants, four of which are crude oil upgrader plants whose important function is to convert extra-heavy crude from the Orinoco Oil Belt into greater commercial value, which as a whole have an installed capacity to improve the production of extra-heavy crude of 710,000 b/day. The fifth plant is an oil mixer. All these plants are located within the José Antonio Anzoátegui Petrochemical Complex, installed at the end of the 1990s and are fed by nearly 2,000 km. pipelines between 16 and 32 inches in diameter, which connect with the nearly 6,000 oil wells located in the Orinoco Oil Belt and the eastern basin. These plants are managed by mixed companies where PDVSA has a majority shareholding.

• Petropiar (AMERIVEN) with capacity of 210,000 B/day operated by PDVSA(70%) and Chevron(30%) Conocco-Phillips dropped 40% in 2007 and sued the state.
• Petromonagas (CERRO NEGRO) with capacity of 150,000 B/day operated by PDVSA (60% shares) and Russian Rosneft (40% shares), on March 27, 2020 Rosneft sells its assets to a Russian state. by December 2019 was producing 80,000 B/day
• Petro San Felix (Petrozuota) with capacity of 160,000 b/day operated by PDVSA but not this operation
• Petrocedeño (SINCOR) with capacity of 190.000 bpd, operated by PDVSA(60% shares), the French Total and the Norwegian Equinor(40%), is paralyzed
• A fifth SINOVENSA plant with installed capacity of 130,000 B/day that mixes the extra-fished crude of the Orinoco with a lighter oil is not a breeder like the previous ones, produces Crude Merey the highest demand in the Chinese market, started in 2008, is producing 70,000 B/day is operated by PDVSA (60% accionaia) and the Chinese company CNPC (40%) who by September 2019 suspended their improved crude purchases

In February 2016, PDVSA sold part of its shares in the Petromonagas mixed company to Rosneft, which went from 16.67% to owning 40%.

When the crude oil is not improved, PDVSA mixes the extra-heavy oil with imported naphtha to produce diluted crude oil (DCO) for export, which is a product of lower commercial value. In July 2019, due to the sanctions, the Due to prolonged power outages and the port of José being saturated with tankers due to the decrease in crude exports, the plants began to recirculate the crude to avoid paralyzing their operation and damaging important parts of the upgrading plants.

As of July 29, 2019, Petropiar began producing 130,000 B/day of Merey crude. Petropiar begins operations as a crude oil mixing plant. On Monday, September 17, PDVSA ordered the suspension of production of the Petropiar upgrader, as its deposits or warehouses were oversaturated; the suspension occurs before its partner Chevron's permit granted by the United States expires until October 27. Oil production fell to 712,000 B/day

• CIPPJAA: Industrial oil and petrochemical complex José Antonio Anzoátegui

Coke as a by-product, export

The accumulation of coke as residues left in the facilities of the complex by the crude upgrader plants formed immense mountains that reached up to 30 to 60 meters high, making Venezuela before 2007 the second exporter of coke with about 8 o 9 ships of 50,000 tons per month of great commercial value in other countries, a fire that broke out on January 3, 2009 in one of the shipping terminals of the "José Antonio Anzoátegui" Cryogenic Complex killed the band that transported the coke to exporting vessels. As of that date, it began to accumulate with an average daily production between the four upgraders of 15,000 tons and for the year 2018 it is estimated between 10 and 40 million accumulated tons, The transnational Koch Terminales y Sólidos del Caribe CA was in charge of laying work on the vessels, and its parent company, Koch Mineral C.A. was in charge of marketing abroad

Sulfur as a by-product, export

Just like coke, it results from the process of improving heavy and extra-heavy oil, obtaining quantities that are stored in deposits at the Jose complex, but in smaller quantities than coke, ready for export.

Sale of PDVSA assets between 2006 and 2015

Between 2006 and 2015, the government of Nicolás Maduro and the government of Hugo Chávez sold many assets of the Petróleos de Venezuela company, including refineries, warehouses, pipelines, and service stations. Petróleos de Venezuela (PDVSA) has divested in those years, a large part of its international refinery and terminal businesses, directing the money collected to its battered cash flow and to dozens of subsidies and State programs. The most serious social damage occurs with several hundred national workers who lose their jobs to be replaced by workers from the new owners. This is the case of Chamette Refining, which in 2015 affected 530 refinery employees. the assets that PDVSA has divested during these years.

In January 2012, Hess Corp. and PDVSA closed their 500,000 bpd Hovensa refinery on St. Croix, Virgin Islands, after racking up $1.3 billion in losses over the past three years and as part of a large number of refinery closures in the northeast of the United States, by different oil companies. The same that was attempted to be sold at the end of September 2014, after the shale boom.

DISTRIBUTION AND TRANSPORTATION SECTOR - Tanker assets - terminals - Oil pipelines

PDVSA has its own fleet of oil tankers run by PDV Marina, including: Ícaro, Yare, Paramaconi, Terepaima (built in 2011), Manuela Sáenz, Negra Matea (formerly Pilín León) and Luis Cáceres de Arismendi.

On April 5, 2019, the United States government sanctioned 34 vessels identified as PDVSA property: POPPY 1, AMUAY, BICENTENARY I, BICENTENARY II, BICENTENARY III, BICENTENARY IV, BICENTENARY V, BICENTENARY VI, BICENTENARY VII, BICENTENARY VIII, BICENTENARY IX, BICENTENARY X, BICENTENARY XI, BICENTENARY XII, BICENTENARY XIII, BICENTENARY XIV, BICENTENARY XV, BICENTENARY XVI, CARIBBEAN, CAYAURIMA, CUMANAGOTO, GARDENIA, GP-21, GP-23, JAZMIN, L-409, MANAURE, MAR A, MARGARITA 1, PDVSA CARDÓN, SABANETA, TRIBILIN, URDANETA and YORACO.

Between January and February 2020, financial problems between PDVSA and the company PetroChina Co Ltd led to the bankruptcy of the company CV Shipping Pte Ltd, which managed four supertankers, causing the loss of three VLCC (Very Large Crude Carrier), with a capacity of more than 300,000 tons: the Junín, Boyacá and Carabobo, after having a year without paying insurance, went to an auction processed before a court in Singapore, in addition to having their bank accounts frozen. The oil tanker Ayacucho was left in owned by Venezuela until November 2020 as the flagship of PDVSA, when it became part of the Russian oil fleet. "It is a ship that carries two million barrels"

GAS SECTOR

The exploitation of oil gas whose production is derived according to its use

• energy use for consumption in the thermoelectric power plant
• domestic use for housing consumption
• use of oil extraction, for oil wells

In June 2009, the government launched a call for medium-sized companies to invest in the large Mariscal Sucre gas project, where some 800 million dollars had been invested during its exploratory phase, the the Japanese companies Marubeni 8002.T, Mitsui, Mitsubishi and Itochu, the Algerian Sonatrach, the Korean Korea Gas, Petronas Gas PGAS.KL from Malaysia, the Norwegian Statoil STL.OL, Galp Energía GALP.LS from Portugal, the Russian Gazprom and the Italian company ENI ENI.MI to participate in the process. The Mariscal Antonio José de Sucre project, which is being carried out in the north of the Paria Peninsula, includes the development of the Dragón, Patao, Mejillones and Río Caribe fields.

PDVSA estimates that the production potential of the Mariscal Sucre project is 1,200 million cubic feet of gas per day, plus 20,000 barrels per day of condensate. However PDVSA has found reserves of 4.2 trillion cubic feet (TCF) in the Dragon field, on the Venezuelan side of its maritime border with Trinidad and Tobago. to produce about 300 million cubic feet that would easily reduce the consumption of about 50 thousand barrels of diesel per day. The production will make it possible to operate the thermoelectric plant in Güiria, which will be 1,000 megawatts. The Mariscal Sucre project is linked to the Gran Mariscal de Ayacucho Industrial Complex (Cigma), in Sucre state, which will be in charge of processing the gas extracted from the coasts. A gas processing plant for internal consumption will be located in the Gran Mariscal de Ayacucho Industrial Complex (CIGMA), in Güiria, Sucre state, which is 80% advanced in its construction.

In January 2023, Trinidad and Tobago obtained an OFAC license to exploit a strategic natural gas area in Venezuelan waters in the Dragon field, although the Maduro government will not be able to receive any cash payment from this project. This is because PDVSA does not have resources for the project and the sanctions limit it. Trinidad is the largest exporter of liquefied natural gas in Latin America.

Fuel subsidies and social programs

Until December 31, 1996, PDVSA, through its affiliated companies, had a monopoly on the sale, marketing, and transportation of all petroleum products and derivatives. As of January 1, 1997, within the framework of what was then called "oil opening", other companies such as Shell, BP or Texaco were allowed to enter the market of said products, although subject to certain limitations, such as the control by decree of the sales price of gasoline, a control that still continues -regardless of the international market price- resulting in a price of 0.097 bolívares fuertes (equivalent to 0.045 dollars) and 0.07 bolívares fuertes (0.032 USD) per liter of 95 and 91 octane gasoline, respectively, being the cheapest product sold in Venezuela and one of the lowest prices -if not the lowest- for gasoline marketing in the world. PDVSA subsidizes gasoline in Venezuela, the The price per liter is USD 0.015, which is why it loses about 6 billion (6 billion) dollars a year. All this is only for political purposes, since the country's economy is in inflation and by 2017 it entered hyperinflation and until the end of 2019 this price was maintained without change in its internal sale price. This policy has resulted in large-scale smuggling crimes that include high-ranking government officials.

Company-funded social programs are a significant part of your spending. Between 2004 and 2010, PDVSA contributed $61.4 billion to government social programs; around half of the funds were used in the Bolivarian Missions and the rest were distributed through the National Development Fund. In 2012 alone, the state company invested 17,300 million dollars in these programs, a figure that was reduced to 13 000 million in 2013.

Oil strike of 2002-2003

Between 2002 and 2003, the Venezuelan oil company underwent a strong restructuring, largely caused by the internal political situation faced by Venezuela during those years. During the month of December 2002, part of the PDVSA workers complied with an indefinite general business strike, called by opposition parties, united in the so-called Democratic Coordinator, the private company. represented by the Fedecámaras employers, and various sectors of civil society, to demand the resignation of Hugo Chávez from the presidency of Venezuela, for having promoted the new hydrocarbons law in November 2001 and for the disagreement with the appointment of the new president of PDVSA to the economist Gastón Parra Luzardo. As a consequence, crude oil production, as well as refining and marketing activities fell by more than 90%.

Coal Production

Venezuela has not been a traditional country that produces coal to the point that in 2019 it tripled its production. In 2019, Pdvsa exported 310,000 tons, generating almost 40 million dollars in revenue. By June 2020, Pdvsa had managed to export 365,000 tons and the largest buyer was the United Kingdom for those years.

Export of coke

Coke production from January to October 2022 multiplied was around 2.82 million tons. Venezuela exported 1.81 million tons of coke to China during 2022, which exceeded the 151,500 tons exported in 2021 to that country. Similarly, 479,500 tons of total coke have been exported to Turkey. Petroleum coke production in January 2023 reached a record of 727,000 metric tons.

Ownership of Shares

The Bolivarian Republic of Venezuela owns all the shares of the company, which is attached to the Ministry of People's Power for Energy and Petroleum. In the 1999 Constitution, it is contemplated that the company maintains the exclusive monopoly of the hydrocarbons found in the Venezuelan subsoil (oil, natural gas, among others) and that its shares cannot be sold to individuals. However, the company can associate and grant concessions for the provision of services related to its products.

Presidents

The following is a list of the presidents that Petróleos de Venezuela has had since the beginning of its operations in 1976:

Directive

The current board of directors is made up of:

• Pedro Rafael Tellechea Ruíz. — President of PDVSA
• Héctor E. Feliloza R. — Vice President of Planning and Engineering
• Erwin E. Hernández H. — Vice President of Exploration and Production
• Gabriel R. Oliveros — Vice Minister of Refination
• Antonio J. Pérez S. — Vice-President of Trade and Supply
• Juan V. Santana M. — Vice President of Gas
• Oswaldo J. Pérez C. — Vice-President of Finanza
• Randel I. Peñas R. — Vice-President of International Affairs
• Yurbis J. Gómez — External Direction
• Ricardo A. León S. — External Directorate
• Wils A. Rangel L. — External Direction
• Ricardo J. Menéndez P. — External Directorate
• Simon A. Zerpa D. — External Directorate

Media

The state company had two of its own media outlets, which were the television channel PDVSA TV and a circuit of radio stations PDVSA RADIO, both currently discontinued.

Logo

The symbol used in the PDVSA logo is based on a petroglyph whose main motif is a representation of the ornate sun, represented in the Guarataro Stone, which was found during explorations near the town of Caicara of the Orinoco. The symbology of the sun as a source of energy is associated in this way with the main activity of the company.