Venezuela's PDVSA has "zero interest" in a crude-for-debt agreement with Europe and prefers oil swaps

Venezuela:  The US State Department in May asked two European oil companies, Italy's Eni Spa and Spain's Repsol SA, to restart their oil-for-loan transactions with Venezuela and send crude to Europe. gave his approval.

According to Reuters, Venezuela's national oil company, Petrolos de Venezuela (PDVSA), is no longer interested in the oil-for-loan agreements that the US State Department approved in May.

Instead, PDVSA has said that future shipments from Eni SPA in Italy and Repsol SA in Spain should be exchanged for motor fuel, the shortage of which is crippling the country, according to sources cited by the outlet.

According to the publication's quoted PDVSA shipping schedule, neither Eni nor Repsol received a loading window for cargo destined for Europe in August.

The US State Department in May authorized two oil companies to resume supplies of crude to Europe that had been halted in 2020. In an effort to oust Nicolas Maduro, who had been duly elected president of the South American nation, then US President Donald Trump was under pressure at the time.

To prepare Europe for Russian oil and petroleum products by imposing economic sanctions against the country due to Moscow's ongoing military operation in Ukraine, Washington approved cashless transactions in May.

The transaction was to proceed with the explicit requirement that all proceeds be used to settle PDVSA's debt in its joint ventures with Eni and Repsol.

Accordingly, 3.6 million barrels of the South American nation's diluted crude oil (DCO) have been shipped to Eni since June, according to PDVSA records and tanker tracking information. Eni sends crude oil for further processing to Repsol, which has a large refinery.

According to cited documents and vessel monitoring, PDVSA's total exports rose to 545,000 barrels per day (bpd) in June and July, thanks to an increase in oil shipments to Europe.

On the other hand, according to the report, the Venezuelan oil company is looking to restart its extra-heavy oil operations in the Orinoco belt. PDVSA has relied primarily on Iranian diluents such as heavy naphtha to convert its extra heavy crude into a grade suitable for export.

PDVSA, Eni, Repsol, or the US State Department have all remained silent regarding the report.

Following Venezuela's 2018 presidential election, which was won by the country's current president, Nicolas Maduro, sanctions were imposed against the democratically elected government. Washington refused to acknowledge Maduro's legitimacy. Venezuela's leader of the opposition and self-proclaimed "interim president" Juan Guaido attempted a coup in 2019, and his claims were accepted by the Donald Trump administration in January 2019.

Maduro criticized the US for working with Guaido to overthrow the legitimate government to seize the nation's vast crude oil reserves.

The sanctions cut PDVSA's access to specialized drilling equipment and foreign investment, as well as threaten secondary sanctions against businesses and nations doing business with the Latin American energy giant. As a result, PDVSA assets worth billions of dollars were confiscated abroad. Nations such as China, Iran and Russia criticized Washington's actions.

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