Written by Staff Writer
An oil tank that was stolen in a 2015 incident and later recovered has become a symbol of Venezuela’s political struggle, with supporters of President Nicolas Maduro blaming one of Venezuela’s biggest independent oil companies for the theft. On July 1, 2015, three tanks belonging to Spain’s Repsol Petroleum were stolen in Tachira state and their crude worth some $1 billion were transported to Colombia.
This oil tank has joined a fight between Venezuelan President Nicolas Maduro and former President Hugo Chavez’s heir, President Rafael Correa. Maduro blames Repsol for the incident. During Correa’s time in office from 2006 to 2016, he was the leading hawk on Venezuela-U.S. relations and played a leading role in the handling of the international media attacks on Maduro and the rising global tensions in relation to the region.
In the meantime, the stolen tank, soon to be placed under police protection and a permanent attraction, continues to attract onlookers and detractors from the world of politics and business.
Here’s what it’s all about.
Where is the tank?
Venezuela’s state-run oil company PDVSA operates the Tachira refinery complex and operates 36 other facilities in the country. According to news reports, Tachira is the most visited area of the country with 3.3 million people visiting each year.
Speaking in 2016, Caracas Mayor Hector Rodriguez said that “for the last three years PDVSA has reported that the Tachira refinery has no employees, as production has decreased in the various areas of the refinery.”
The tank that was stolen is found in Tachira state, adjacent to the refinery and close to the Tachira river. While one tank has been recovered by Venezuelan authorities, the other two remain missing.
According to a daily government news service, these are the stolen assets: “The most important ones are the tanks 18-22 and 25-27 which hold, in addition to crude oil, all the residue that would have come from the refinery. These are two of the three tanks that were stolen, and the third is locked and sealed so it cannot be stolen… so those tanks are trapped.”
Before the tank was found, former Argentine President Cristina Kirchner and Spain’s Mariano Rajoy issued a joint statement warning both companies of the risks involved in crude theft.
“This is a serious and very important warning not only to PDVSA and Repsol, but also to the Venezuelan government: Do not threaten national sovereignty by a violent — or even accidental — attack on these assets,” the statement said.
What effect has it had on Venezuela’s oil industry?
“A heavy blow” was the word used by Repsol’s CEO to describe the incident last week.
According to the company, approximately 40 million liters of crude oil, or 22,500 barrels, have been left at the Tachira refinery in Venezuela and will remain there until the company finds a way to redirect it or a buyer.
The oil that was stolen from the tank was from the storage facility’s produce units and not crude — the crude tanks in the refinery process crude oil and refine the product. Therefore, the oil is not damaged.
Lior Dagan, analyst at Counterpoint Energy Research told CNN, “PDVSA is forced to transfer crude of this scale to the refineries. As the company continues to struggle in order to keep production at Tachira at an acceptable level, as one would expect, PDVSA will try to get these crude deliveries from other, larger terminals. This will impose additional heavy costs for the company.”
He added, “Currently, PDVSA and Repsol have their storage tanks spread out across PDVSA’s oil processing complexes. However, tank sizes have been doubling over the past few years as operating facilities have closed their production capacity. This would mean that the approximately 40 million liters (16.9 million barrels) is transferred from one tank to another. No production capacity is taken away from the company, although with a simple tank capable of holding a reserve of 2 million barrels, the difference can only be roughly 10%. However, due to the complex nature of the infrastructure, it’s difficult to pinpoint exactly how much (some estimates were from 100,000 barrels per day) comes from each facility. If it’s the result of transferring, then it’s a harsh blow.”
“Even if the oil is exported as a refined product, it’s been transported on a 400-kilometer (248 miles) pipeline from one point to another in order to reduce the load, a mode of transport the government has itself said it was looking to discontinue in the near future. From our point of view, this is very bad for crude inventories, and can very well cause export prices to increase. Additionally, these barrels can only be exported,