Exports to US slide; Figures from Washington show a sharp drop in United States imports of Venezuelan oil

Caracas Daily Journal (Jeremy Morgan): Venezuela's oil exports to the United States fell by more than a quarter during the first three months of this year compared with the final quarter of 2007, according to figures from the Department of Energy in Washington. Imports of Venezuelan oil slumped to an average 1,033,000 barrels a day (b/d) in January-March this year. Just three months before, the comparable figure was 1,387,000 b/d.

The reasons for this slump of 354,000 b/d, or 25.5 percent, in shipments to by far the biggest oil export market Venezuela are a matter of conjecture and debate. The official rationale doesn't really pan out, or at least not on its own.

Energy & Oil Minister Rafael Ramirez attributes the decline to a programmed shut-down at Petrocedeno, an extra heavy crude oil field in the Orinoco Basin. But even if Petrocedenño output was down to zero, industry analysts say that wouldn't entirely account for the drop in deliveries to the U.S.

The absence of a convincing explanation from Ramirez -- who should know since he's not only minister but president of the state oil corporation, Petroleos de Venezuela (PDVSA) -- has inevitably set alight the oil industry gossip mill. Several possible reasons are doing the rounds. One is that the fall results from a deliberate decision in Caracas to reduce Venezuela's dependence on the United States. President Hugo Chavez has threatened to do so in the past.

However, Venezuela has yet to line up solid long-term export deals with alternative outlets, for all the talk of bargaining with China and India. And in any case, those markets are much further away, with higher transportation costs.

Another explanation more or less echoes the Ramírez version of events -- a decline in output. The difference is that production is thought to be down not only at Petrocedeno but elsewhere despite official insistence to the contrary. Or the reason could lie at the U.S. Strategic Petroleum Reserve. This theory has it that officials are switching purchases from Venezuela because of misgivings about this country's reliability as a supplier.

Chavez' threats lend some weight to this case. It's noted three other OPEC countries -- Iraq, Kuwait and Ecuador -- boosted exports to the United States in the first quarter. This in turn undermines ideas about recession-hit U.S. demand. And then there's PDVSA's long-running dispute with ExxonMobil over compensation in one of the Orinoco fields. This may have a bearing on sentiment at the strategic reserve.

PDVSA won the first round when a court in London ruled it had no jurisdiction over a case brought by ExxonMobil. But another court in The Hague has yet to rule on a similar petition. And even if that goes the same way, the really big one awaits at a court in New York.