Despite sitting on top of the world’s largest crude reserves, the reach of Venezuela’s state-owned oil company is receding.
In the 1980s Petroleos de Venezuela SA started an international expansion with the objective of finding new outlets for its growing oil production. The company bought Citgo Petroleum Corp. in the US, leased the Isla refinery in Curacao, bought a stake in a refinery in Jamaica and more recently sought to convert a refinery in Aruba into an oil upgrader.
Four decades later, with oil production at a 69-year low and a humanitarian crisis unfolding, the reg- ime of Nicolas Maduro has lost Citgo and its three refineries in America. Now the control over its Caribbean refineries is slipping through his fingers amid US sanctions.
The Isla refinery in Curacao, operated by PDVSA since 1985, is dismissing contractors and shutting through the rest of the year after sanctions cut off access to materials and chemicals needed to operate the refinery. Citgo laid off employees in Aruba as the refurbishment of the oil refinery can’t move forward due to sanctions. The Jamaican government is seeking to buy out PDVSA and take full control of the Petrojam refinery after sanctions made it impossible to operate under PDVSA ownership.
All told, the PDVSA of Maduro has lost a combined 1.34 million barrels a day of refining capacity after the US ratcheted up sanctions at the end of January.