Follow-the-money of Crude Cocktails, Jacob Gelt Dekker Nicolas - TopicsExpress



          

Follow-the-money of Crude Cocktails, Jacob Gelt Dekker Nicolas Maduro, President of the Bolivarian Republic of Venezuela, urgently needs to make some more money. With oil prices dropping steadily, the State of Venezuela lost 30% of its income from oil production, that provides 96% financing of its national budget. The price of Venezuela’s oil basket fell another US $ 5.07 per barrel this week to US $ 77.65. Compared to prices earlier this year, Venezuela is missing out on roughly US $ 60-70 million per day. Venezuela’s oil is heavy with API’s of 10-20. API gravity is an inverse measure of relative density of petroleum in reference to water at 10, and used to compare petroleum liquids. Light crudes are around 30, heavy, 10 and below.) For years, the smart oil cookies of Maracaibo and Caracas have been mixing the extra heavy oil of Venezuela with diluents like the very expensive, Naphtha, to produce more attractive lighter blends. Under the urgent monetary market circumstances, Pdvsa is forced to watch its cost structure and avoid losses. Therefore, it will replace its own light crude, Mesa-30 as diluent, with cheaper foreign light crudes. In the process, Isla at Curacao will be turned into a synthetic crude processing plant for the new cocktails. The parliamentary discussions on Curacao scheduled for next week, about the future of the Isla, have been effectively circumvented with this new fait accomplit. Isla will be a synthetic crude manufacturer instead of a full fledged highly sophisticated refinery as off November 2014. Two 1-million-barrel cargoes of Russia Urals-light crude (API 31) will be shipped to Curacao early November. Pdvsa bought the crude from a unit of Petrochina and not from Russia, so the formal sanctions for the Crimea conflict of the EU on Russian products do not ban these oil transaction. Also, Curacao’s Isla will not involved in any of the purchase or sale transactions and will solely function as the blender, shaking the new crude cocktail, that will get Maduro some more cash. Since most of the oil lots will, most likely, be traded on the Rotterdam Oil Exchange, the Kingdom may have to look into the transactions after all, because where does the money flow?? Under president Chavez, considerable amounts of money from somewhat similar transactions flowed into a special fund, often labeled sarcastically by the press, as the “President’s pocket money,” instead of Pdvsa-treasury or government coffers. It will be a test of integrity to follow-the-money destined for the cash strapped Bolivarian Republic of Venezuela from these oil transactions, originating in the Russian Federation and kindly facilitated by the People’s Republic of China.
Posted on: Tue, 21 Oct 2014 08:20:51 +0000

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