Chinese are busy like little bees and have been building refineries to refine VZ’s “sludge.” They knew this move was coming too, and have been building storage to hold the stuff in order to not cost their buddy Hugo anything when the change came.
Result to date? Last time I checked, Jan-Feb this year, Chinese PLUS Russian heavy/sour refining capacity was on the order of 175Kbbl/day. Sure, they'll build some (very expensive, highly specialised) plant. No doubt. However, you **know** what prayers the ChiComs have to be saying every night, dontcha?
''Please God, don't let anyone shoot Hugito''.
Why? Because he's very likely the only dumb sumbich in the entire oil industry -- anywhere -- who jabbers on about moving a hard-to-handle grade of crude 8000-10000 miles more than necessary, for political reasons.
The ChiComs aren't stupid; Hugito is. They know that the minute Hugito goes away, so does 95+% of their input for the shiny new heavy/sour refineries. Sure, they can still run other grades, assuming anyone trusts them sufficiently, but the minute Chavez is out of the picture, the ChiComs start losing their a$$ on the whole deal.
In short, and net-net, I'm just quaking in my boots that Hugito might cut a deal with the ChiCons. Sure I am.