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View of a shanty town in Port-au-Prince, Haiti. (Photo: Blockchain Land)

PDVSA production disruption behind Haitian trouble

View of a shanty town in Port-au-Prince, Haiti. (Photo: Blockchain Land)

Fuel shortages, in addition to allegations of corruption and political turmoil are the embers on which troubled conditions in Haiti are throwing off more heat.

Collapse of PDVSA has affected Venezuela’s PetroCaribe Agreement and created a crisis in Haiti.

The collapse of Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil and natural gas company has affected Venezuela’s arrangement under the PetroCaribe Agreement, creating an economic crisis in Haiti.

PetroCaribe is a mechanism for selling oil at preferential prices with financing for the residents of the region.

The programme has been affected by PDSVA’s fall in production and the US sanctions. In Haiti itself, writers note financial irregularities under the agreement, with billions of dollars unaccounted for. 

“Inventories on land and floating storage facilities are full because PDVSA’s customers — new and traditional — have cancelled cargoes on schedule in August and September because they cannot find tankers to cover the routes to and from Venezuelan ports amid the US sanctions.”

-SP Global

PetroCaribe delivered crude oil to the Monetisation Bureau of Development Aid Programmes, which proceeded to sell it to private Haitian companies, researchers revealed. 

Proceeds were expected to be used to rebuild infrastructure, primarily for health, education, housing and roadways, however around US$2 billion is estimated to have disappeared and is still unaccounted for.

PetroCaribe was created to sell oil at preferential prices with financing for the countries of the region.

The production levels by PDVSA and its international partners in the Orinoco Belt  have fallen  due to a lack of tankers for exporting crude oil and a surplus of crude inventories at the oil terminals.

SP Global reports that “inventories on land and floating storage facilities are full because PDVSA’s customers — new and traditional — have cancelled cargoes on schedule in August and September because they cannot find tankers to cover the routes to and from Venezuelan ports amid the US sanctions”.

Apart from Haiti, the PetroCaribe programme included Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, Guatemala, Guyana, Grenada, St Kitts-Nevis, St Lucia, St Vincent and the Grenadines, El Salvador, the Dominican Republic and Suriname.

The fuel shortage, in additional to allegations of corruption, is one of the reason for the current turmoil in Haiti. (Photo: telegraph.co.uk)

In June 2018 Venezuela announced that it was suspending shipments to all these nations due to a drop in production, with the notable exception of Cuba.

The challenges have deepened in 2019. However, an October 2019 report by Reuters indicates that PDVSA expects crude output to rebound to above 1.2 million barrels per day (bpd) next year, according to a copy of the company’s 2020 budget, a figure nearly double current level.

There was no indication of how the company plans to raise crude output, which fell to around 650,000 bpd in September.