Adds Chevron comment in 4th paragraph
Venezuelan PdV's PetroPiar joint venture with Chevron resumed its heavy-crude upgrading operations in recent weeks and is now positioned to load a synthetic crude cargo on behalf of the US major.
The PetroPiar plant, one of four original upgraders at Venezuela's Jose terminal, had briefly operated as a less complex crude blending facility last year because of PdV's difficulty in securing naphtha required to transport the 8-10°API crude from Venezuela's Orinoco oil belt. Traditional naphtha supply from the US was cut off by sanctions. But blending brought its own challenges, as PdV's light and medium crude production has dwindled and an imported cargo of Nigerian Agbami crude was exhausted.
PdV operates PetroPiar with a 70pc stake. Chevron holds the balance. The US company said it does not discuss specific commercial transactions. "International crude marketing activities that ultimately pay for expenses related to the maintenance of operations are permitted under OFAC General License 8D. The company acts in full compliance with all applicable laws and regulations," Chevron said today, referring to Venezuela sanctions regulations set by the US Treasury Department's Office of Foreign Assets Control (OFAC).
The resumption of more than 100,000 b/d of syncrude production at PetroPiar contributes to a recovery in Venezuelan output to more than 800,000 b/d, and tentatively diversifies the Opec country's export slate from an extended focus on 16°API Merey blend favored by Chinese and Indian refiners.
Merey is still produced by PdV's PetroSinovensa blending venture with Chinese state-owned CNPC at Jose. The other three upgraders are halted.
Shipping data indicates that the Greek-flagged VLCC Great Lady is currently berthed at Jose, where it may be loading 26°API Hamaca syncrude for Chevron. It is not clear where the US company will take the cargo, as US sanctions prohibit importing it into the US. The firm has historically taken some Venezuelan crude to its 333,000 b/d Pascagoula refinery in Mississippi.
The export to Chevron also diversifies the lifting pool. Over the past year, Russian state-controlled Rosneft has emerged as the main lifter of Venezuelan crude, bringing some of the supply to its Indian refining system. Spain's Repsol also picks up Venezuelan oil as payment from PdV for its remaining upstream production.
The Chevron loading comes ahead of the 22 January expiry of a sanctions waiver allowing the Houston-based company to continue its Venezuela operations. The White House imposed the sanctions in January 2019, compounding financial sanctions levied in August 2017, in an effort to oust Venezuelan president Nicolas Maduro in favor of opposition leader Juan Guaido.
Guaido overcame a government maneuver this week to replace him as head of the National Assembly. The move would have undermined his constitutional claim to an interim presidency recognized by the US, the EU, Canada and several Latin American countries.
By Patricia Garip
