Venezuela's sludgy oil is worse than ever. Refiners complain

Venezuela's Deteriorating Oil Quality Riles Major Refiners
Oct. 18, 2017, at 12:08 p.m

By Alexandra Ulmer and Marianna Parraga

CARACAS/HOUSTON (Reuters) - Venezuela's state-run oil firm, PDVSA, is increasingly delivering poor quality crude oil to major refiners in the United States, India and China, causing repeated complaints, canceled orders and demands for discounts, according to internal PDVSA documents and interviews with a dozen oil executives, workers, traders and inspectors.

The disputes involve cargoes soiled with high levels of water, salt or metals that can cause problems for refineries, according to the sources and internal PDVSA trade documents seen by Reuters.

The quality issues stem from shortages of chemicals and equipment to properly treat and store the oil, resulting in shutdowns and slowdowns at PDVSA production facilities, along with hurried transporting to avoid late deliveries, the sources said.

U.S. refiner Phillips 66 canceled at least eight crude cargoes because of poor oil quality in the first half of the year and demanded discounts on other deliveries, according to the PDVSA documents and employees from both firms. The canceled shipments - amounting to 4.4 million barrels of oil - had a market value of nearly $200 million.

Another key buyer of Venezuelan crude - India's Reliance Industries Ltd, operator of the world's largest refinery - has repeatedly complained about oil quality, a PDVSA employee told Reuters. State-run firm China National Petroleum Corp (CNPC) also complained earlier this year about excessive water levels in oil cargoes, a former PDVSA employee said.

The deterioration of PDVSA crude is the latest symptom of the firm's ill-maintained production infrastructure, and it threatens to accelerate an already severe cash crisis at a time when Venezuela is hoarding dollars to pay some $3.4 billion to bondholders in the next few weeks. PDVSA's financial woes radiate through the country's recession-racked economy, which depends on oil for more than 90 percent of its export revenue.

-snip-

https://www.usnews.com/news/top-news/articles/2017-10-18/venezuelas-deteriorating-oil-quality-riles-major-refiners

Maduro missed a $1,000,000,000 payment to the Russians in June. They are fully into a "grace period" with other bond holders, with not a peep from their usual Twitter feeds about "the check is in the mail". (He has another week to pay up) They owe another $2 billion by November 3, and another $1.4 billion two weeks later. THESE DEBTS HAVE NO GRACE PERIOD. Either Maduro pays up on time, or he defaults. No one is lending Chavismo any fresh money (he can't borrow without the approval of the AN), and what he does have stashed away won't feed the country for a month. The Bolivar is worthless, and the highest denomination bill is only worth a few cents.

Maduro has NOTHING of value to sell, and what he does have is SHITTY quality.