Venezuela move: Petrobras' storage contract at BORCO has been terminated
PDVSA evicts Petrobras from BORCO
Venezuelan state-owned producer PDVSA has terminated Brazilian counterpart Petrobras' remaining oil storage contract at the PDVSA-owned BORCO terminal, and aims to sell the facility, industry sources claimed.
Petrobras received the final notice to give up a storage capacity of 1.4 million barrels at BORCO terminal in the Bahamas yesterday, following an initial notice in January.
"Petrobras was given three months to evacuate the facilities," a source told Reuters. "Petrobras has used the 1.4 million barrel storage tanks for storing and blending fuel oil."
Petrobras was not given a reason for the contract's termination.
The Brazilian company was forced to give up its crude storage at BORCO in August last year.
The BORCO tank facilities have a crude oil storage capacity of 4 million barrels and storage capacity of 8 million barrels for products.
The remaining tenants at BORCO terminal are Vitol, Shell, BP and Westport.
However, sources said PDVSA was expected to take over the entire terminal soon as talks about the owner seeking a buyer for the facilities heat up, a Reuters report said.
"We have heard PDVSA is seeking a buyer for BORCO, and they may have already contracted someone to facilitate the potential sale," the source said.
Petrobras is seeking storage space in the Caribbean, but to no avail due to high demand and limited availability, he said.
Since losing its crude storage at BORCO, Petrobras has been shipping its Marlim crude to the US Gulf Coast in larger Suezmax tankers from Brazil rather than aframax tankers from BORCO terminal, the source said.
Besides BORCO, Petrobras also has storage facilities at St Eustatius in the Caribbean.
PDVSA has several tank facilities in different locations in the Caribbean, which it uses to manage its oil logistics.