I was looking into the impact of Chavez's recent move to cut-off supplies to Exxon's downstream operations and came across two documents on the web which seem to imply there will be little to no impact on Exxon's ops.
http://www.chron.com/disp/story.mpl/front/5535989.html
http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2003/venezuelan/vzimpacts.htm
According to the EAI 80% of Venezuelan crude imported by the US/ Virgin islands is process by 11 refineries. Exxon has a stake in only one of these refineries, located in Chalmette LA, which is actually a joint venture between Exxon and PDVSA.
According to the Houston Chronicle article PDVSA said in its statement that its decision regarding Exxon Mobil will not affect "contractual agreements related to joint investments overseas."
It's not clear whether this includes the JV in Chalmette. But with a capacity of 185,000 barrels per day (50% owned by PDVSA and 50% owned by Exxon) it's a drop in the bucket to Exxon's refinery throughput of 5.7 mmbpd (Q4 2007).
Go Chavez, way to stick it to those capitalist swine!
Subscribe to:
Post Comments (Atom)
1 comment:
If Chavez really wanted to affect the world oil market, he would cut production, instead of "boycotting" Exxon.
Boycotting a certain country or entity will only cause short term logistics problems, since theoritically, as soon as the boycott starts, oil stops going to the refinery. However, the Venezuelan fields will still be producing oil that must be refined. The Venezuelan oil will go to another refinery and displace the oil that was being refined there before, which will be put on the worlwide market.
The Exxon refinery will be needing more oil to refine, so it will acquire the amount it lost from Venezuela on the same open world market.
The severity of the supply disruption will depend time frame of the purchasing contracts. The shorter term they are, or if there is a force majeur clause, the easier it will be to resupply the Exxon refinery.
If Chavez really wanted wreak havoc on world oil markets, he would decrease production levels, physically removing an amount of oil from the market. This, however, would have a negative effect on the Venezuelan economy, and since they are currently going through times of economic harship, would not help his socialist ambitions.
Post a Comment