PdV starts piecemeal oil transfer, Eni on standby
Venezuela's state-owned PdV has begun a limited transfer of crude from its impaired floating storage vessel, but a more efficient large-scale operation recommended by PdV's Italian partner Eni still hinges on US and Venezuelan approval.
Using a 30,000 bl barge, PdV is gradually siphoning off some of the crude from the Venezuela-flagged Nabarima floating storage and offloading vessel (FSO) in the shallow Gulf of Paria. From the barge, the oil is transferred to PdV's Panama-flagged Aframax Icaro, with the goal of reaching its 700,000 bl of capacity in about two weeks, according to two sources close to the operation.
Laden with around 1.3mn bl of 23°API crude, the FSO has been moored at PdV-operated joint venture PetroSucre's Corocoro offshore oil field for 10 years, but has undergone only limited maintenance, sparking fears of a catastrophic oil spill.
PdV's minority partner in PetroSucre is Eni, which has said it is seeking approval from Venezuela and "formal assurance" from the US before proceeding with "state-of-the-art solutions" to remove the oil from the stricken vessel.
Eni and contractors that would be involved in the operation are awaiting a letter from the US State Department to ensure that no sanctions would be breached. The US embassy in nearby Trinidad and Tobago said on 16 October that the sanctions on Venezuela are not designed to "target activities of safety, environmental, or humanitarian concerns." But given the vast scope of US oil and financial sanctions on Venezuela, the parties are seeking more robust and specific legal cover before proceeding with the operation and arranging corresponding payment from PdV. Their discussions with Caracas are ongoing.
Highlighting the risks, the Icaro is among several tankers already subject to US sanctions.
PdV has not commented aside from stating in early September that the FSO posed no environmental risk.
Whether the Nabarima continues to be offloaded in a piecemeal fashion by PdV, or through a larger more efficient operation suggested by Eni, it is unclear how the crude will be marketed. Eni is entitled to its 26pc share in PetroSucre, but it could negotiate to lift a greater volume as payment for its transfer services.
Eni and its Spanish partner Repsol already lift Venezuelan crude as payment from PdV for their offshore natural gas production in the Perla field off western Venezuela. The transactions are balanced out by shipments of low-sulphur diesel under a sanctions exception that the US has said it is seeking to close off as part of its "maximum pressure" campaign on Caracas.
Trinidad allays fears
Since it started listing and flooding around August, the Nabarima has set off environmental alarms in the Caribbean, especially in Trinidad and Tobago. The Gulf of Paria separates Trinidad from Venezuela by 16km (9.9mi) at their closest point.
A three-member inspection team from Trinidad visited the FSO on 20 October, and is recommending the use of a larger tanker "to reduce the time and the logistics of the transfer" and to "reduce the possibility of any environmental incident," energy minister Franklin Khan said late yesterday But he added that the vessel is now upright and stable, and there is "very minimal if any risk of tilting or sinking … and there is very minimal risk of an oil spill."
The inspectors from the energy ministry, the coast guard and the maritime services division confirmed that during a recent incident when the Nabarima's engine room was flooded, there was no mixing of oil and bilge water, and that the oil did not leak from the containment tank, implying that the double hulls are intact.
Trinidad is also seeking to conduct a follow-up inspection in November.
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Saudi Aramco cuts official August crude prices for Asia
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