A dispute over a Venezuelan oil coke contract has left tankers waiting to load cargo jammed and some customers have to look for alternative supplies.
There are 8 other ships near the Venezuelan ports, waiting to load a combined 350,000 tons, according to what was seen by the specialized energy platform, quoting Reuters.
This came after the Venezuelan National Oil Company (Petroleos de Venezuela), last June, suspended its contract with the Geneva-based Marwell Trading Company, following a dispute over accounts payable, and the extension of the Venezuelan Oil Coke contract.
Petroleum coke is a solid waste product from oil refining. It is used as a substitute for coal because it contains higher energy, but its emissions are high. Therefore, it is used less in power plants, while it is used a lot in factories, especially cement factories.
Venezuelan oil supplies and prices
A cement company in South India revealed that Venezuelan oil supplier Kok had canceled 3 contracts since last month, citing doubts about its ability to deliver the product.
“We expect someone else to step in instead of Marwell now,” said the CEO of the company, refusing to reveal the name of the company’s suppliers.
Petroleos de Venezuela has in recent months approved new buyers and intermediaries for petroleum coke sales, a move to expand its client list and reach buyers directly abroad.
Another company stated that “no Indian buyer should attempt to obtain Venezuelan material without the assurance that payment will only be made upon discharge,” citing past delivery delays.
International oil coke prices fell in the current year (2023) amid imbalances in supply and demand, according to the “i-Energy Natural Resources” company, which is based in the Indian state of Gujarat; However, a similar drop in coal prices prompted some importers in Asia to turn away from Venezuelan oil coke.
Venezuelan oil coke sold at $105 a ton at the end of last week, while Saudi-origin oil coke was priced at $103 a ton and oil coke from the US Gulf Coast for delivery to India was priced at $105 a ton in the same period, according to i-Energy.
Venezuelan oil exports declined
A 2017 contract between Venezuela’s national oil company (Petroleos de Venezuela) and Geneva-based Marwell Trading helped the country’s exports of by-products grow 7-fold between 2021 and 2022.
Venezuela’s exports of petroleum coke fell to 56,000 metric tons in June, from more than 620,000 tons in January.
So far this month, Petroleos de Venezuela has allowed only one cargo of 70,000 tons to be loaded, and shipping data seen by Reuters showed the ship did not set sail until Tuesday.
Last year (2022), Venezuela exported about 3.3 million metric tons of oil coke, most of which was handled by Marwell, which in recent years has signed commercial agreements with other companies to reach end customers.
And last April, Petroleos de Venezuela began registering new customers for oil coke, according to the documents and people close to the matter, to expand the list of customers amid scrutiny of unpaid bills from various customers and brokers.
Kok’s controversial Venezuelan oil contract
Petroleos de Venezuela has stopped delivering oil coke to Marwell Trading, owned by Venezuelan businessman Wilmer Roberti, amid a commercial dispute over a sales contract.
And Petroleos de Venezuela – earlier this year (2023) – began auditing accounts with the Geneva-registered Marwell company, as part of a large-scale audit of the accounts due to the national oil company, according to what was seen by the specialized energy platform, in Reuters.
At the time, Marwell owed the state company $423.7 million from coke oil sales that had taken place since January 2020, according to a review by Petroleos de Venezuela. Marwell disputed these numbers.
According to the 2017 contract, Marwell had to invest at least $138 million in infrastructure repairs in exchange for the rights to sell about 12 million metric tons of petroleum coke produced by Petroleos de Venezuela, amounting to $11.50 a ton at the time.
The contract turns Marwell into the entity responsible for most of the country’s exports of petroleum by-products that are burned as an alternative to coal.
The owner of “Marwell” Wilmer Roberti said that the contract – which is scheduled to expire in 2021 – was extended for two years due to the Corona virus pandemic, which is now being contested by Petroleos de Venezuela, denying any wrongdoing, and confirming that he still owes $ 300 million. .
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