Russia Takes $30 Million In Venezuela Oil Hostage Over Unpaid Debt

Tuesday, April 18, 2017
By Paul Martin

by Tyler Durden
ZeroHedge.com
Apr 18, 2017

Despite having made its bond payment due last week, Venezuela’s state oil company, PDVSA, remains in fire financial straits, with virtually no funds or liquidity, and regardless of the close Russia-Venezuela ties, a Russian state-run shipping company has taken a tanker of PDVSA crude “hostage” in the Caribbean over $30 million worth of unpaid shipping fees.

Russia’s shipper Sovcomflot sued PDVSA in the Dutch island St. Maarten in the Caribbean and “imposed garnishment on the aforementioned oil cargo,” Reuters reported on Tuesday, citing a St. Maarten court decision. PDVSA had sent the oil cargo to the Caribbean in October last year, hoping it could net around $20 million from the sale of the crude, but Sovcomflot claims the cash-strapped state-run Venezuelan company owes $30 million in unpaid shipping fees.

Nearly half a year after crossing the Caribbean, the NS Columbus has transfered its cargo of crude to a storage terminal on St. Eustatius, an island just south of St. Maarten, under the court court. Another tribunal in England will decide if Sovcomflot will ultimately take the oil. Reuters adds that the dispute, which is being heard by the United Kingdom Admiralty Court, highlights how shipping companies are becoming increasingly aggressive in pursuing PDVSA’s debts.

It also shows that political allies such as Russia are losing patience with delinquent payments from Venezuela, whose obsolete tankers are struggling to export oil and even to supply fuel to the domestic market.

Making matters even more complicated, PDVSA owes not only shipping fees to the Russian company, but also millions of U.S. dollars to terminals around the Caribbean, including the St. Eustatius terminal – where the oil is currently held – owned by U.S. company NuStar Energy, Reuters reported citing a PDVSA executive and an employee at one of the terminals. Furthermore, PDVSA’s “tangled web of payment disputes” now spans the entire world, from unpaid shipyards in Portugal and half-built tankers in Iran and Brazil to the seized cargo in tiny St. Eustatius, whose strategic location in the Caribbean made it an 18th century colonial-era trading hub.

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