Opportunity Crudes

Climate scrutiny has hit oilsands producers on two fronts: exports to the US via pipelines and meeting Scope 1 GHG emissions-reduction targets.

The South American oil producer's foreign oil companies association (AVHI), the oil services chamber (CPV), and gas processors chamber (AVPG) have penned a letter to Venezuelan National Assembly oil and Energy Commission Head Angel Rodriguez calling for "a permanent dialogue" between the Oil Ministry, PDVSA, the legislature, and the industry chambers to address contract compliance with "existing j.v. and natural gas licenses; timely payment of financial, commercial and dividend debts; and the optimization of autonomous operational, financial, labor, security and environmental management of the j.v.s."

According to Argus, Canadian crude exports to the US are expected to rise over the remainder of this year due to a combination of rising Canadian oilsands production because of rising oil prices and demand combined with higher pipeline export capacity out of Canada.

When prompted, officials with the Biden Administration and the US State Department have not given any indication that the US will ease sanctions on Venezuela that have decimated the Latin American country's fuel industry and have led to a dearth of fuel.

Colombia's Ministry of Mines and Energy said on May 11 that local crude production fell 13.1% from March 2020 levels to 744,715 b/d in March 2021 as investment in Colombia's oil patch remains subdued due to the fallout from the COVID-19 pandemic.

According to PDVSA documents and tanker tracking data, the South American country exported a total of 25 oil cargoes last month, carrying 688,533 b/d of crude and fuel, which was steady from its March exports.

As a result of COVID-19 outbreaks at 12 oilsands production sites in Alberta as contractors are flying in for maintenance season, some planned maintenance at oilsands upgraders is being postponed.

Canada's CBR exports fell in Feb caused by low output and poor arbitrage.

Due to a combination of lack of investment by state energy firm PDVSA in local oilfields and infrastructure and US sanctions, Venezuelan oil output has fallen from over 2.1MM b/d in 2016 to just 500K b/d last year, and it will take significant investment to return Venezuelan oil production back over 2.0MM b/d.

According to internal PDVSA documents and Refinitiv Eikon data, Venezuela exported 248K b/d of oil directly to China last month, more than double the volumes exported to the country in Feb.