News Archive

BMW recalling 154,472 vehicles in U.S., Canada over fuel pumps

DETROIT BMW (BMWG.DE) is recalling 154,472 vehicles registered in the United States and Canada for a fuel pump problem that could cause stalling, according to a filing with U.S. safety regulators and BMW.

BMW told regulators that no injuries have been reported. Since 2014, the German-based company has conducted safety recall campaigns in China, Japan and South Korea for the same issue, according to a filing posted on Friday by the U.S. National Highway Traffic Safety Administration.

Of the vehicles recalled in North America, 88 percent are registered in the United States.

BMW is recalling certain vehicles in the United States and Canada for model years 2007-2012. Among them in the United States are the X5 3.0si, X5 4.8i, X5 M, X5 xDrive30i, X5 xDrive35i, X5 xDrive48i and X5 xDrive50i, 2008-2011 X6 x Drive35i, X6 xDrive50i and X6 M, 2010-2011 X6 ActiveHybrid, according to the filing.

Also the 535i xDrive Gran Turismo, 535i Gran Turismo, 550i xDrive Gran Turismo and 550i Gran Turismo, 2011-2012 528i, 535i, 535i xDrive, 550i and 550i xDrive and 2012 535i ActiveHybrid, 640i Convertible, 650i Convertible, 650i xDrive Convertible, 650i Coupe and 650i Coupe xDrive vehicles.

BMW will notify owners and dealers to replace a fuel pump module free of charge beginning in early December. BMW owners can call BMW customer service for details.

(Reporting by Bernie Woodall; Editing by Jeffrey Benkoe)

Article source:

Madoff trustee reaches $277 million accord with money manager’s family

The court-appointed trustee liquidating Bernard Madoff’s firm said on Friday he has reached a settlement with the family of late Beverly Hills money manager Stanley Chais that will provide more than $277 million to victims of Madoff’s Ponzi scheme.

Irving Picard, the trustee, said victims will receive at least $232 million of cash, and the rights to $30.7 million of assets that are expected to be sold.

A separate $15 million fund will pay claims by California investors, resolving litigation by that state’s Attorney General Kamala Harris, and which had been brought in 2009 by her predecessor, California Governor Jerry Brown.

Friday’s settlement requires approval by U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, who oversees the liquidation of Bernard L. Madoff Investment Securities LLC. A hearing is scheduled for Nov. 22.

The cash payout would boost to $11.46 billion the sum that Picard has recovered for former Madoff customers, or 65 percent of their estimated $17.5 billion loss. Picard has said half of the 2,597 accounts with valid claims have been fully paid off.

Madoff, 78, is serving a 150-year prison term after pleading guilty to running a decades-long fraud uncovered in December 2008.

Chais, who died in September 2010 at the age of 84, once handled investments for elite Hollywood clients like Oscar-winning director Steven Spielberg, and had been a close friend of Madoff since the 1960s.

Picard had sought to recoup $1.32 billion of “fictitious profits” that he claimed the Chais defendants, including Chais’ widow Pamela, withdrew from Madoff’s firm.

The U.S. Securities and Exchange Commission in June 2009 filed a related civil lawsuit against Chais, claiming he ignored red flags that Madoff’s seemingly steady returns were bogus.

In a court filing, Picard’s lawyers said the settlement covered all of Stanley Chais’ estate and substantially all of his widow’s assets, and represented “a good faith, complete and total compromise.”

Chais had maintained that he was also a Madoff victim and had lost nearly all of his own money.

Lawyers for the Chais defendants did not immediately respond to requests for comment.

Through Sept. 30, more than $1.42 billion has been spent on recovery efforts, including $824.6 million for legal fees for Picard’s law firm Baker Hostetler and $370.2 million for consultant fees, a Thursday court filing shows.

A $4 billion fund overseen by former SEC Chairman Richard Breeden will also compensate Madoff victims.

The cases are Picard v Chais et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01172; and In re: Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789.

(Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky and Cynthia Osterman)

Article source:

VW says 1.23 million diesel cars have been refitted with software update

BERLIN Volkswagen said it has refitted 1.23 million diesel cars with a software update on pollution control systems as it pushes steps to overcome its emissions scandal.

The number of 1.2-litre and 2.0-litre diesel cars repaired has more than doubled within several weeks from 500,000 previously, a Volkswagen (VW) spokesman said.

The refitted cars include models from VW brand, Audi, Skoda, Seat and VW commercial vehicles, he said.

Some 5.6 million vehicles have so far been cleared for repair by Germany’s motor vehicle authority KBA. Approval by the KBA is valid for countries throughout Europe where 8.5 million diesel cars are affected by VW’s emissions test-cheating scandal. About 11 million cars are implicated globally.

(Reporting by Andreas Cremer; editing by Edward Taylor)

Article source:

EU privacy watchdogs warn WhatsApp on privacy policy, Yahoo on breach

BRUSSELS European privacy watchdogs said on Friday they had sent letters to WhatsApp over its sharing of information with parent company Facebook and Yahoo over a 2014 data breach and its scanning of customer emails for U.S. intelligence purposes.

European Union data protection authorities said they had serious concerns about WhatsApp’s recent change in privacy policy in which it would share users’ phone numbers with Facebook, its first change in policy since Facebook bought the messaging service.

The authorities, known as the Article 29 Working Party, “requested WhatsApp to communicate all relevant information to the Working Party as soon as possible and urged the company to pause the sharing of users’ data until the appropriate legal protections could be assured.”

A spokeswoman for WhatsApp said the company was working with data protection authorities to address their questions.

“We’ve had constructive conversations, including before our update, and we remain committed to respecting applicable law,” she said.

The watchdogs also wrote to Yahoo over a massive data breach that exposed the email credentials of 500 million users, as well as its scanning of customers’ incoming emails for specific information provided by U.S. intelligence officials.

They asked the company to communicate all aspects of the data breach to the EU authorities, to notify the affected users of the “adverse effects” and to cooperate with all “upcoming national data protection authorities’ enquiries and/or investigations.

“Yahoo was invited to provide information on the legal basis and the compatibility with EU law of any such activity,” the watchdogs said in a statement regarding the email scanning.

The Yahoo and WhatsApp cases will be discussed by regulators in November.

(Reporting by Julia Fioretti; editing by Jason Neely)

Article source:

Global stocks sag as bond ‘bloodbath’ shows no sign of letting up

LONDON Stocks fell on Friday, curbed by the continued surge in global bond yields, while the dollar hit a three-month high against the yen as investors grew more confident that the Federal Reserve will raise U.S. interest rates by the end of the year.

Benchmark 10-year U.S. and euro zone yields rose to their highest since May and 10-year British yields were firmly on track for their biggest monthly rise since January 2009, the second biggest in over 20 years.

Investors’ focus turns to third quarter U.S. gross domestic product figures later on Friday after upbeat jobless claims, manufacturing and home sales data on Thursday strengthened the case for the Fed to raise rates by the year-end. [ECONUS]

“Bond markets are facing a recurring nightmare at the moment as we continue to see yields rise sharply,” said John Reid, a market strategist at Deutsche Bank.

Analysts at Rabobank deemed the bond market sell-off a “bloodbath”, although questioned whether the economic fundamentals justified such a steep rise in yields.

Europe’s index of leading 300 shares .FTEU3 was down 1 percent in early trade at 1,337 points, Germany’s DAX was down 1 percent .GDAXI and Britain’s FTSE 100 was down 0.6 percent .FTSE100.

MSCI’s global stock index was down 0.2 percent .MIWD00000PUS, the fourth consecutive down day marking a losing streak not seen for two months.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.3 percent, pressured by the prospect of easy money flows being crimped should the Fed tighten policy soon.

The one bright spot in Asia was Japan, where the weak yen helped lift the Nikkei 225 index .N225 by 0.6 percent for a weekly rise of 1.5 percent.

The Fed, Bank of Japan and Bank of England all deliver their latest policy decisions next week. The Fed is 90 percent certain to hold its fire, according to fed fund futures pricing on the Chicago Mercantile Exchange. But the probability of a rise in December, after the U.S. presidential election, is 72 percent.


In a week marked by deep slides in prices of U.S. and European debt, the benchmark 10-year Treasury yield US10YT=RR climbed to a five-month high on Friday just under 1.88 percent, helped along by the surging British Gilt and German bund yields.

A sell-off in gilts had led the way on Thursday as strong third quarter U.K. growth data doused expectations for monetary easing by the Bank of England.

The 10-year Gilt yield GB10YT=TWEB has risen nearly 20 basis points this week to levels not seen since Britain’s vote in June to leave the European Union. The 10-year yield has risen more than 50 basis points this month.

Germany’s 10-year bund yield DE10YT=TWEB rose to 0.219 percent, its highest since early May, and marking a sharp turnaround from the record low minus 0.20 percent in July under the European Central Bank’s extensive monetary easing.

But along with U.S. and UK yields, they have recently risen amid concerns that ultra-easy policies practiced by the major central banks could have their limits and may not be continued indefinitely.

Boosted by the spike in Treasury yields, the dollar scaled a three-month peak of 105.42 yen JPY=.

“105 (yen) was both a psychological and technical point, and it broke ahead of U.S. GDP later today,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

“Some people did not want to be short ahead of that, also with the Bank of Japan and Fed meetings next week, and U.S. non-farm payrolls data one week from today.”

The rise in euro zone bond yields boosted the euro’s appeal and lifted the single currency by a quarter of one percent to $1.0924 EUR= on Friday.

The dollar index .DXY was little changed at 98.880 after rising about 0.2 percent on Thursday. It was on track to gain about 0.3 percent this week, having struck a nine-month peak along the way.

In commodities, crude oil gave back some of Thursday’s gains. Brent crude LCOc1 was down 0.3 percent at $50.33 a barrel and U.S. crude was down 0.4 percent at $49.50 CLc1.

(Reporting by Jamie McGeever; Editing by xxxxxxxx)

Article source:

UBS ups reserves for U.S. mortgage case, forecasts tough markets

ZURICH UBS (UBSG.S) increased reserves for penalties tied to mis-selling residential mortgage-backed securities (RMBS) by more than $400 million to $1.405 billion as it posted an 11 percent rise in third-quarter pre-tax profit.

The Swiss bank made the disclosure in its quarterly report on Friday, following news last month that the U.S. Department of Justice had demanded a $14 billion fine from Deutsche Bank (DBKGn.DE) in a similar investigation.

This was far more than analysts had expected and prompted fears UBS, the world’s biggest wealth manager, could also face a stiffer penalty.

UBS’s pre-tax profit for the three months to end-September rose 11 percent year on year to 877 million Swiss francs ($883 million), ahead of market forecasts, thanks to a strong business in the Swiss market and cost cuts.

Nevertheless, UBS maintained its gloomy outlook amid negative interest rates in Switzerland, cautious client activity and economic uncertainty.

“These conditions are unlikely to change in the foreseeable future,” UBS said in a statement.

The bank’s shares were indicated 1.8 percent higher in pre-market business JBPRE01.


UBS did not benefit from the same surge in investment banking revenues experienced by U.S. banks since its business is more geared toward equities, and Wall Street earnings were boosted by bond trading.

It is the downside to UBS’s widely lauded post-financial crisis strategy to focus on capital-light wealth management while scaling back in investment banking and fixed income, where earnings are more volatile and which consume more capital.

In the tough environment, UBS’s flagship wealth management saw a sixth straight quarter of falling or stagnating gross margins. But the division’s net margin – which factors in cost savings – rose slightly to 27 basis points.

Net profit fell to 827 million francs from 2.1 billion francs in the same quarter last year, which had benefited from a net tax benefit of 1.3 billion francs.

Net new money inflows – a volatile but important indicator of future earnings in private banking – totaled 9.4 billion francs at its wealth management unit and $800 million at its wealth management business in the Americas.

UBS saw a positive impact from deferred tax assets (DTAs) of 424 million francs, the bulk of the roughly 500 million the bank had guided for in 2016. DTAs are tax breaks from losses suffered in the financial crisis.

The bank’s common equity tier 1 capital ratio, an important measure of balance sheet strength which UBS uses as a benchmark for its dividend, fell to 14.0 percent from 14.2 percent due to a slight rise in risk-weighted assets.

Chief Executive Sergio Ermotti told CNBC the bank’s focus is on delivering the same ordinary dividend as in 2015 of 0.60 francs per share.

UBS said Hong Kong’s regulator was investigating the bank’s role as sponsor of some initial public offerings.

(Editing by Michael Shields and Alexander Smith)

Article source:

BOJ loses bark and bite under humbled Kuroda

TOKYO As his term winds down, Bank of Japan Governor Haruhiko Kuroda has retreated from both the radical policies and rhetoric of his early tenure, suggesting there will be no further monetary easing except in response to a big external shock.

In a clear departure from his initial “shock and awe” tactics to jolt the nation from its deflationary mindset, he has even taken to flagging what little change lies ahead, trying predictability where surprise has failed.

This new approach will be on show next week, when the BOJ is set to keep policy unchanged despite an expected downgrade in forecasts that could show Kuroda won’t hit his perpetually postponed 2 percent inflation target before his five-year term ends in April 2018.

“The days of trying to radically heighten inflation expectations with shock action are over,” said a source familiar with the BOJ’s thinking. “No more regime change.”

Kuroda told parliament last week that while the BOJ might again stretch the timing for its inflation target, he saw no need to ease at the Oct. 31-Nov. 1 policy meeting.

“There may be some modification to our forecast that inflation will hit our 2 percent target during fiscal 2017,” he said, the first time he has offered hints on upcoming projections.

Japan’s core consumer prices fell for a seventh straight month in September as household spending slumped, data showed on Friday, reinforcing the view it will take some time for inflation to accelerate to its target.

In the past, the market has learned to expect the unexpected.

In 2013, when the BOJ deployed its massive asset-buying program, dubbed “quantitative and qualitative easing” (QQE), his shock therapy boosted stocks and weakened the yen.

Further surprises came with an expansion of QQE in October 2014, and then the switch to negative rates early in 2016, which he had denied was an option just days before.

But the law of diminishing returns bought him less bang for each buck.

“When monetary policy options begin to wear out, the shock approach doesn’t work any more,” said Toshiro Mutoh, former BOJ deputy governor and now chairman of Daiwa Institute of Research.

“That’s why the BOJ needs to avoid surprising markets and make its intentions more predictable through guidance.”


When inflation gave up the ghost again after initially showing signs of life, the BOJ was forced to revamp its policy framework last month to one better suited to a protracted battle against deflation.

Since then, Kuroda has been jettisoning nearly everything that made his BOJ unique.

He once derided his predecessor for blaming deflation on demographics and Japan’s low growth potential, and in 2013 accepted sole responsibility for hitting 2 percent inflation. Now he says monetary policy alone cannot beat deflation and has called for government efforts to boost growth.

Gone are the fixed timeframes he set for hitting that price goal, along with his reassurances that he would do “whatever it takes” to beat deflation.

In a sign that the rising cost of his 80 trillion yen ($765 billion) a year bond buying could discourage further easing, the central bank said on Monday that some regional banks were struggling to earn profits as margins narrowed.

“It would probably take something very damaging to the economy, like a huge yen spike, for the BOJ to ease again,” said Masaaki Kanno, a former BOJ official who is now chief Japan economist at JPMorgan Securities.

The BOJ’s policy targeting the pace of money printing has been replaced by a complex “yield curve control” (YCC) with two targets – a short-term rate target of minus 0.1 percent and a 10-year bond yield target “around” zero percent.

“It doesn’t look like Kuroda’s style at all,” another source said.

The new framework reflected the outcome of a comprehensive re-assessment of its policies the BOJ conducted last month, which included an unusually frank acknowledgement of what went wrong with Kuroda’s monetary experiment.

The BOJ admitted there was no direct link between the pace of money printing and inflation expectations in the short run. It also said its stimulus program wasn’t powerful enough to weather headwinds and heighten inflation expectations.

The make-over could also have driven a wedge between him and some BOJ members who had hitherto formed his majority on a divided board.

Reflationist board member Yutaka Harada and Deputy Governor Kikuo Iwata have both sounded discordant notes in support of bond purchases despite the new framework, while Kuroda has said the pace of purchases could slow if the bank can hit its yield control target with less buying.

All of which strips Kuroda of the assurance he once projected.

“Yield curve control is an untested policy, so there’s uncertainty on how it works,” Mutoh of Daiwa Institute said.

“It’s an enormous new challenge for the BOJ.”

(Reporting by Leika Kihara; Editing by Will Waterman)

Article source:

Consumers, exports seen buoying U.S. third-quarter GDP growth

WASHINGTON U.S. economic growth likely accelerated in the third quarter as consumers maintained a strong pace of spending and exports surged, potentially keeping the Federal Reserve on track to raise interest rates in December.

Gross domestic product probably increased at a 2.5 percent annual rate after expanding at a 1.4 percent pace in the second quarter, according to a Reuters survey of economists. That would be the strongest growth rate since the second quarter of 2015.

In addition to support from consumer spending and exports, the economy is also expected to have received a boost from a rebound in mining activity and inventory investment.

“As long as you have consumer spending, some stabilization of capital spending, trade kicking in and inventories switching from being a significant drag, that balanced composition will make us confident that things are moving in the right direction,” said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

But GDP growth could surprise on the upside after data on Wednesday showed a sharp drop in the goods trade deficit in September. The government will publish its first estimate of third-quarter GDP on Friday at 8:30 a.m.

If growth meet expectations, it should help dispel any lingering fears the economy was at risk of stalling. Over the first half of the year, growth had averaged just 1.1 percent.

Though the Fed is mostly focused on employment and inflation, signs of economic strength would be supportive of an interest rate hike in December. The U.S. central bank raised its benchmark overnight interest rate last December for the first time in nearly a decade.


Consumer spending likely continued to power the economy in the third quarter, even as the pace slowed from the second quarter’s robust 4.3 percent rate. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have increased by as much as a 2.8 percent rate.

“The consumer is the shining star of the economy,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Fundamentals support consumer spending going forward. Household balance sheets are in good shape, job growth is solid and wage growth is accelerating.”

A surge in soybean exports likely helped to shrink the trade deficit in the third quarter. As a result, economists expect that trade contributed a full percentage point to GDP growth in the third quarter after adding a mere 0.18 percentage point in the April-June quarter.

There are concerns that the soybean-driven export growth spurt could reverse in the fourth quarter. Economists, however, also note that exports of capital and consumer goods have been growing strongly in recent months.

Businesses probably increased spending to restock after running down inventories in the second quarter. JPMorgan estimates that businesses accumulated inventories at an $11 billion rate in the last quarter.

Inventories fell at a $9.5 billion pace in the second quarter, the first decline since the third quarter of 2011, and have been a drag on GDP growth since the second quarter of 2015. They are expected to have contributed at least half a percentage point to GDP growth in the third quarter.

A rise in gas and oil well drilling likely bolstered business investment. Spending on nonresidential structures, which include oil and gas wells, is expected to have increased by as much as a 10.7 percent rate in the third quarter after falling at a 2.1 percent pace in the second quarter.

However, business spending on equipment likely dropped for a fourth straight quarter. While the pace of decline has been ebbing as oil prices stabilize and the dollar’s rally gradually fades, a strong turnaround is unlikely in the near-term.

Heavy machinery maker Caterpillar (CAT.N) this week reported a 49 percent drop in third-quarter profit from a year ago and lowered its full-year revenue outlook for the second time this year. Caterpillar said demand for new heavy machinery had been undercut by an “abundance” of used construction equipment, a “substantial” number of idle locomotives and a “significant” number of idle mining trucks.

“A rebound in oil and gas drilling will provide a boost to third-quarter investment, but otherwise there does not seem to have been a substantial improvement in the weak investment spending trend of the past two years,” said Ted Wieseman, an economist at Morgan Stanley in New York.

Investment in residential construction likely fell for a second straight quarter, while spending by the government probably bounced back.

(Reporting by Lucia Mutikani)

Article source:

Crisis at Venezuela’s PDVSA deepens as Caribbean debts pile up

HOUSTON Unpaid debts and broken promises are making Venezuelan oil giant PDVSA an outcast in several Caribbean countries where it had been a guest of honor.

The state-run company’s crumbling finances are causing operational disruptions across one of its most essential regions, according to internal company documents, six sources with knowledge of its operations, and Thomson Reuters vessel-tracking data.

Business partners in the island nations of Curacao, Bonaire, Jamaica and the Bahamas are turning away from the firm as debts pile up to tugboat operators, ship brokers, maritime agencies and terminal owners, the sources and documents show.

The company’s problems include blocked loading operations in the Bahamas and threats from the governments of Curacao and Jamaica to replace PDVSA as a partner of refineries in both places. Many vessels are also anchored offshore, blocked from discharging cargoes at ports because PDVSA has not paid suppliers and business partners.

The mounting Caribbean problems are adding to a broader crisis for PDVSA, which is already reeling from declining production, low crude prices and an unprecedented economic downturn at home. The company saw operating cash flow plummet by 63 percent, to $2.1 billion, in the first quarter compared to the same period a year earlier, according to its most recent financial report.

PDVSA’s Caribbean operations represent a quarter of its global refining capacity and serve as a loading hub for a third of its exports of crude and fuel oil.

For a graphic on PDVSA’s facilities in the Caribbean, see:

“PDVSA has absolutely lost ground in the Caribbean,” said Lisa Viscidi, director of Energy, Climate Change and Extractive Industries at the Inter-American Dialogue in Washington, noting falling oil sales in the region for the past two years.

PDVSA did not respond to repeated requests for comment.

In the latest mishap, a PDVSA fuel-oil cargo bound for Asia has been trapped in the Caribbean sea for more than a month after a court ordered the detention of the tanker “Hero” in Curacao, according to sources with direct knowledge of the situation and Thomson Reuters vessel-tracking data.

Curacao’s port authority barred the ship from leaving on Sept. 18 after a unit of Core Laboratories won the court order to force payment of delinquent debts, according to two people with direct knowledge of the matter. PDVSA had allegedly failed to pay the unit, Saybolt, several million dollars for months of oil testing services.

Mark Elvig, general counsel for Core Laboratories, declined to comment.


The problems reflect a stark reversal for a company that has been a trusted partner of governments in the Caribbean.

About a decade ago, Caribbean countries laid out red carpets for PDVSA executives, who came offering cheap oil under the Petrocaribe program that leftist President Hugo Chavez launched to win allies as a bulwark against Washington.

Petrocaribe worked well for years, as poor islands curbed the impacts of rising global oil prices and Venezuela bartered oil for everything from medical services to black beans.

PDVSA had used Caribbean facilities to offset frequent outages and incidents plaguing its storage, refining and port networks in Venezuela. The region offers vast storage capacity, ample refineries and crude blending facilities, and deep water docks to load Very Large Crude Carriers (VLCC) for trips to Asia.

But the relationships of the past are now increasingly strained as suppliers and service providers go unpaid.

“PDVSA’s cash flow problems are impacting routine operations,” a trader at a private company that has worked with PDVSA in the Caribbean told Reuters on condition of anonymity. “You only accumulate several million dollars in debt for port services by not paying for months or even years.”

The company has slashed its operating budget to $45 million monthly from $145 million monthly in 2015, the PDVSA trading team source said. That budget pays for all trade activities in Venezuela and overseas, the source said, including tanker cleaning, routine inspections, storage, brokerage, freight costs, port services and oil imports.


The tanker detention came days after Curacao’s government signed a memorandum of understanding with Guangdong Zhenrong Energy, indicating the Chinese firm could soon replace PDVSA as the operator of the Isla refinery in 2019.

Officials in Curacao have said the move follows years of frustrated efforts to persuade PDVSA to invest $1.5 billion to upgrade Isla.

“We have decided not to wait any more and look for alternatives,” said Ben Whiteman, the island’s Prime Minister, in a broadcasted speech in September.

The island’s government declined a Reuters request for comment, and the Chinese firm did not respond.

PDVSA said in a September news release that the renewal of its lease is not up for negotiation yet.

Isla is strategically important because its lease contract includes the Bullenbay terminal, with 17.75 million barrels of storage and blending capacity. Bullenbay is where PDVSA receives the imported light oil it mixes with its own extra heavy crude to create an exportable blend.

Also in September, Winston Watson, general manager of Petrojam – Jamaica’s state company that owns the Kingston refinery – said he was fed up with PDVSA’s foot-dragging on upgrading the plant.

“If they say no, then I guess we would have to go to the market and seek another investor,” he said of PDVSA to lawmakers in parliament, according to a transcript.

Petrojam and the Jamaican government did not respond to requests for comment.


Another setback came in the Bahamas. For about a month starting in mid-September, PDVSA was blocked from loading cargoes at the massive BORCO terminal because of late rent payments for storage tanks, according to one of the PDVSA sources and a ship broker.

The BORCO standoff contributed to an ongoing decline in PDVSA’s exports – and its ability to generate cash – just as payment delays snarled its imports.

In September, PDVSA’s crude exports suffered an annual decline of 12 percent to 1.55 million barrels per day, according to Thomson Reuters Trade Flows data.

U.S.-based Buckeye Partners, which operates the terminal, did not respond to multiple requests for comment.

Near other Caribbean and Venezuelan ports, about a dozen tankers carrying around 2.5 million barrels of light crude and products – including two cargoes supplied by BP – have been stuck at sea for weeks at a time, waiting for payment from PDVSA before discharging, according to traders from private firms and vessel tracking data.

In May, Venezuelan President Nicolas Maduro made an official visit to Jamaica and sought to reassure Caribbean dignitaries of PDVSA’s long-term health.

“Be confident,” he said. “Venezuela has faced situations even more difficult than the one we are passing through.”

(Reporting by Marianna Parraga in Houston, with additional reporting by Sailu Urribarri in Aruba, Rebekah Kebede in Kingston and Alexandra Ulmer and Andrew Cawthorne in Caracas; Editing by Terry Wade and Brian Thevenot)

Article source: