The Sinopec lawsuit seeks $23.7 million plus punitive damages.
The Sinopec lawsuit seeks $23.7 million plus punitive damages.

Sinopec Sues Venezuela's PDVSA Over Unpaid Bills

Sinopec Sues Venezuela's PDVSA Over Unpaid Bills

One of China’s biggest state-held companies, Sinopec, is suing Venezuela’s debt-ridden state oil firm PDVSA in a US court over unpaid bills, in a sign that China may be losing patience with its Latin American ally and is changing tone and tactics.  
The US unit of Sinopec filed the lawsuit at the Texas Southern District Court in Houston on November 27 and the nature of the suit is “other fraud”, Oil Price reported.
The language of the complaint suggests that the Venezuela-China alliance may be over, Financial Times reported, citing the court documents it has seen.
In the lawsuit, Sinopec is suing PDVSA for $23.7 million plus punitive damages, alleging that PDVSA has only paid half of the bill in a contract from 2012 to purchase steel rebar—which is used in oil rigs—for $43.5 million from the Chinese firm.  
In the complaint, Sinopec accuses PDVSA of having used “an under-capitalized shell with the sole purpose of preventing Sinopec from having a remedy” and says its conduct “constituted intentional misrepresentations, deceit and concealment of material facts” involving “willful deception” and coordinated conspiracy to defraud several units of PDVSA.
“This is when we know that China is not going to bail these guys out,” Russ Dallen of boutique investment bank Caracas Capital, who follows Venezuela closely, told FT.
"The lawsuit initiated by Sinopec could be interpreted as mounting evidence that China would no longer want to extend loans to Venezuela and that changed position may have tipped the country and its oil firm into default," he added.
China, as well as Russia, has been extending credit to Venezuela in oil-for-loan deals. But PDVSA has been struggling to ship oil to Russia and China in return. As early as in February this year, PDVSA was said to have been months behind in oil shipments to its key allies.
The only creditor apparently still willing to work with Venezuela is Russia. Last month, when rating agencies started declaring Venezuela in selective or restricted default, Russia and Venezuela signed a deal to restructure $3.15 billion worth of Venezuelan debt owed to Moscow.


Short URL : https://goo.gl/z3agqB
  1. https://goo.gl/MHoksZ
  • https://goo.gl/HWh7yh
  • https://goo.gl/bHb3V6
  • https://goo.gl/wAL7AR
  • https://goo.gl/m2LbNe

You can also read ...

Philippines Struggles to Embrace Renewable Energy
Renewable energy costs are falling across the world, but the...
OPEC Not Rushing to Boost Production
OPEC is not in a rush to start winding down the production...
India to Keep Fuel Prices in Check
India is looking at ways to keep rising fuel prices in check,...
Iran's electricity industry ranks 14th in the world in terms of output.
Driven by its vast potential in the electricity industry, Iran...
Oil Prices Rise as China, US Put Trade War on Hold
Oil prices rose on Monday as markets reacted to news that...
Shourijeh Gas Storage Capacity to Reach 4.5 bcm
Shourijeh natural gas storage facility in the northeastern...
Changing Working Hours  Could Help Save Electricity
Changing working hours in state organizations during peak...

Add new comment

Read our comment policy before posting your viewpoints