Venezuela Financial Scheme for Uruguayan Oil

Instant Max AI

(Energy Analytics Institute, Jared Yamin, 3.Mar.2015) – Venezuela announced a financing scheme for oil shipments to Uruguay, according to a decree revealed on March 2, 2015 in Venezuela’s Official Gazette newspaper.

Over the short-term 90 days, the payments for the shipments generate interest at a flat 2 percent. Over the long-term, up to 15 years, because of the amortization of capital, there will be a two-year grace period and an annual interest rate of 2 percent.

The financed amounts will be determined by the following (see Table 1):

TABLE 1:

Avg Price⁄bbl —- Determination factor

>- 15 ———- 5%

>- 20 ——— 10%

>- 22 ——— 15%

>- 24 ——— 20%

>- 30 ——— 25%

Source: 1) Avg Annual Sales Price⁄bbl (FOB-Venezuela), 2) Determination factor for financial resources (%). Venezuela Official Gazette

Of the long-term financed portion, at least 50 percent (equivalent to 12.5 percent when the oil sales price is equal to or greater than $30/barrel) can be classified under the Compensation Fund which allows for the exchange of goods and/or services by the government of Uruguay.

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