August 10, 2020 at 4:07 am

U.S. glass maker seeks to seize Venezuela-owned oil tanker to collect award, court papers show

By Meeta Ramnani

U.S. glass manufacturer O-I Glass Inc is seeking to seize an oil tanker owned by Venezuela to collect part of a $500 million arbitration award it won after the 2010 expropriation of two manufacturing plants, according to a summons filed with a Singapore court seen by Reuters.

The attempt is a new threat against Venezuelan state oil company Petroleos de Venezuela’s [PDVSA.UL] fleet of tankers at a time when U.S. sanctions on the firm are making it difficult for the company known as PDVSA to book ships to transport its crude.

The lack of available tankers has contributed to a collapse in Venezuela’s oil exports to below 400,000 barrels per day (bpd), down from around 1.5 million bpd before Washington imposed the sanctions in an effort to oust socialist President Nicolas Maduro. Exports are at the lowest level in over seven decades for the crisis-stricken OPEC nation.

With Washington ramping up pressure, the use of its own in-house fleet of tankers is one of the few options left to PDVSA for exporting its crude, and a loss of any of those vessels would make that more difficult.

The Singapore lawsuit brought by O-I Glass, formerly known as Owens-Illinois Inc, also highlights the risks to PDVSA’s assets around the world from creditors seeking to collect on unpaid debt or arbitral awards, which have mounted as Venezuela’s economy has collapsed under Maduro.

In the summons to the Singapore court, dated June 4, O-I Glass asserted it was entitled to shares in Ayacucho Shipping Pte Ltd, a Singapore-based company that was the vehicle through which PDVSA’s maritime subsidiary, PDV Marina, and China’s PetroChina co-owned the vessel named Ayacucho.

The vessel was one of four that the two companies jointly owned through their Singapore joint venture CV Shipping. CV Shipping began a court-administered liquidation process in February, according to an entry in Singapore’s government gazette.

Venezuela’s state-run maritime authority INEA became the owner of Ayacucho in May and changed the vessel’s name to Maximo Gorki, according to shipping database Equasis and Refinitiv Eikon.

It was unclear if the transfer of the tanker’s ownership to INEA would affect O-I Glass’s attempts to take control of the vessel.

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Meeta Ramnani

Meeta develops credible content about various markets based on deep research, opinions from experts and inputs from industry leaders. As the managing editor, she assures that every piece of news and article adds to the knowledge of decision makers. An avid bike rider, Meeta, is a postgraduate from Indian Institute of Journalism and New Media (IIJNM) Bangalore, where her specialization was Business Journalism. She carries experience from mainstream print media including The Times Group and Sakal Media Group.

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