Oil Updates — Crude up; Devon to buy RimRock’s assets for $865m; Venezuela demands prepayment on spot oil sales
RIYADH: Oil prices held firm at near 13-week highs on Thursday after China reported stronger-than-expected exports in May — although new Shanghai lockdown restrictions capped gains.
Brent crude futures for August rose 35 cents, or 0.3 percent, to $123.93 a barrel at 0404 GMT, while US West Texas Intermediate crude for July was at $122.35 a barrel, up 24 cents, or 0.2 percent.
Devon to buy RimRock’s Williston basin assets for $865 mln
Devon Energy Corp. said on Wednesday it would acquire the leasehold interest and related assets of RimRock Oil and Gas in the Williston Basin in North Dakota for $865 million.
RimRock is a portfolio company of funds managed by US private equity powerhouse Warburg Pincus and is focused on the acquisition and development of North American oil and gas assets.
RimRock has over 38,000 net acres of total land holdings in the Williston Basin.
Devon said it intends to approve a 13 percent increase to the fixed quarterly dividend following the closing of the deal, expected in the third quarter.
Venezuela demands prepayment on spot oil sales after buyer defaults
Venezuela’s state-run PDVSA last month began switching most oil sales to prepayment, requiring spot cargo buyers to pay in full before tankers can set sail after several recent defaults, three people close to the decision said.
The new payment terms, first communicated in April to companies intermediating in the oil sales, sharply reduced May oil exports and left tanks storing the country’s flagship crude grade near full capacity.
As more loaded vessels waited for authorizations to set sail, the volume of crude stuck in the tankers almost doubled to 3.7 million barrels so far this month from 1.9 million barrels in March, PDVSA’s documents showed.
PDVSA’s demand comes after at least three tankers left Venezuelan waters this year without buyers paying for the cargoes.
Since 2019, Venezuela, a member of the Organization of the Petroleum Exporting Countries, has relied on firms with a little track record of trading after its big customers pulled out due to heavy US sanctions on the country. Washington has identified many of these firms as shell companies.
If the move succeeds, PDVSA could accelerate cash flow from the sales, the people said.
(With input from Reuters)