The Malta Independent 13 December 2019, Friday

Russian chemicals to Venezuela: Hurd’s Bank ‘out of our jurisdiction’, government says

Neil Camilleri Saturday, 16 November 2019, 10:34 Last update: about 26 days ago

Any illegalities or sanction breaches at Hurd’s Bank, off the east coast of Malta, would be taking place outside Maltese territorial waters and, therefore, outside of Malta’s jurisdiction, the Foreign Affairs Ministry has confirmed.

The ministry was replying to questions on claims that the United States government is investigating reports that the offshore area has become a staging ground for ship-to-ship transfers to hide Russia’s supplying of chemicals that Venezuela’s industry desperately needs to dilute its heavy crude.

The probe was confirmed this week by a senior US official speaking to the Associated Press on the condition of anonymity.

The Malta Independent asked the Foreign Affairs Ministry whether it was aware of these reports, whether these alleged cargo transfers go against United Nations or other international sanctions, and whether Malta has engaged with the Russian Federation on this issue.   

A spokesperson for Minister Carmelo Abela said Malta, “as a UN member state, supports every effort aimed at upholding international law and is pleased to support and cooperate with the United Nations Security Council members and its EU partners in this regard.”

This specific report, however, relates to activities taking place on the high seas outside Malta’s jurisdiction, the ministry said.

As much as 435,000 tonnes of Russian oil products are reported to have completed ship-to-ship (STS) operations off Malta for onward shipment to Venezuela in January-June, according to data from oil analytics firm Vortexa.

The agency had reported in August that a total of 13 tankers were involved in the Venezuelan shipments. They loaded mostly clean products — notably naphtha, which accounted for around 330,000 tonnes. But a middle distillates cargo and a shipment of vacuum gasoil (VGO) were also spotted.

The rare shipment of Russian VGO could be linked to recent efforts by Venezuelan state-owned PdV to boost scarce gasoline supplies in the country.

While using ship-to-ship transfers off Malta for the creation of larger cargoes for long-haul shipments is relatively common, the trend of onward shipments to Venezuela has developed this year, with no evidence of it having happened in 2018.

The naphtha shipped to Venezuela via Malta this year has was usually loaded from the Black sea port of Tuapse.

Venezuela requires naphtha for blending with its extra-heavy sour crude to create diluted crude for transport and blending. But US sanctions have blocked access to the US-produced naphtha, prompting Caracas to look further afield for supplies.

Direct shipments of oil products from Russia to Venezuela have also occurred this year, according to various reliable reports.

Just 280,000 tonnes of Russian products were shipped to the US via Malta in January-June, down from 440,000 tonnes a year earlier. Products shipped to the US from Malta include VGO and straight-run fuel oil — tight supplies of these products in Europe in recent months could have contributed to the reduction in transatlantic flows.

Venezuela reportedly received at least 616,000 barrels of petrol and 500,000 of vacuum gas oil (VGO) via Malta.

More Russian cargoes could be coming as the vessel commander, which loaded VGO in Taman in late July, is also reportedly heading for Malta.

“Criminals connected to Venezuela are getting increasingly creative as they manipulate the laws that govern international maritime commerce to bypass sanctions,” said Ian Ralby, head of IR Consilium, a U.S.-based consultancy focused on maritime and resource security.

“Authorities in the region and beyond need to be both alert and proactive in preventing the Maduro regime from using illicit activity to convert Venezuelan resources into cash.”

Along with the chemical transfers, there is also reportedly a great deal of petrol transfers taking place at Hurd’s Bank.

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