“This Is Terrible For PDVSA”: Conoco Begins Confiscating Venezuela Oil Assets, Infuriating China
by Tyler Durden
ZeroHedge.com
Mon, 05/07/2018
While there is an increasingly more overt trade war being waged between China and the US, a more covert – and arguably important – contest between the two superpowers is currently being fought for spheres of influence, most notably in Africa, which is now largely a Chinese colony, in Latin America, where increasingly more countries are gravitating toward China and away from the “west”, and more recently, even Europe.
Of all such “zones of influence”, the one country where Beijing has arguably invested the most is Venezuela, and for obvious reasons: the country with the world’s largest petroleum reserves has found itself in a spiraling economic crisis in recent years and with the US refusing to step in and provide much needed funding, it allowed both China and Russia to provide the Maduro regime with loans, mostly in the form of vendor financing, as new Chinese and Russians funds were wired in exchange for Venezuela oil delivery contracts, typically struck well below prevailing market prices.
Which is why China is sure to be incensed following the latest indirect attempt by the US to further limit Venezuelan oil output, and impair the production capacity of what has become one of China’s key Latin Americans clients.
Here’s what happened.
On April 25, ConocoPhillips won a ruling that said the US major was entitled to more than $2 billion from Venezuela’s insolvent state oil company, PDVSA, over the country’s expropriation of several oil projects more than a decade ago. The drawn-out international legal struggle began in 2007 when ConocoPhillips and Exxon Mobil refused to cede control of their major oil production ventures to the Venezuelan government, as demanded by Hugo Chávez, who was president. The U.S. firm left the country after it could not reach a deal to convert its projects into joint ventures controlled by PDVSA, even as several other oil companies, including Chevron, Repsol of Spain and Total of France, agreed to the demand and accepted partnerships with the national oil company, Petróleos de Venezuela, better known as PDVSA.
The Rest…HERE
