Venezuela oil exports accelerate, India awaits cargoes
Venezuela kicked off the new year with at least 730,000 b/d of crude exports, led by several India-bound cargoes, according to local and international shipping data obtained by Argus.
In the first half of January, a half dozen tankers loaded at state-owned PdV's Jose terminal, most recently the Maltese-flagged VLCC Lucky Trader carrying heavy sour Merey blend due to arrive at Indian Reliance's 1.36mn b/d Jamnagar refinery on 19 February. The cargo came from the PetroMonagas joint venture between Venezuela's state-owned PdV and Russian state-controlled partner Rosneft.
At least two more VLCCs are heading to the subcontinent from Jose, including the Liberian-flagged Boston carrying diluted Orinoco crude (DCO) lifted by Italy's Eni and due at India's Sikka terminal for Reliance on 8 February, and the Greek-flagged Maran Libra carrying Merey lifted by Rosneft and due in India on 21 February.
Rosneft lifted another 3.9mn bl of Merey aboard the Maran Triton and Maran Cygnus since 1 January. The Russian firm routinely ships Venezuelan cargoes to its 400,000 b/d Vadinar refinery in India, and books the supply as debt payments from PdV.
The outlier in the Venezuelan export roster so far this month is Great Lady, which is currently anchored off Aruba for a likely transshipment of 26°API Hamaca synthetic crude lifted by Chevron. The cargo came from Chevron's PetroPiar joint venture with PdV, which recently resumed its original upgrading function after a blending stint in 2019.
US refiners are not permitted to process Venezuelan crude under the terms of sanctions, which are aimed at overturning the government of President Nicolas Maduro. The US Treasury is likely to renew Chevron's sanctions waiver to operate in Venezuela when it expires next week, as opposition leader Juan Guaido sustains his fragile political campaign to install a transition government.
Upstream rebound
The bustling activity at Jose, where tankers have been ordered to switch off transponders since last year, contrasts with export bottlenecks in 2019 caused by the sanctions and dock breakdowns that caused Venezuelan crude production to plummet to an estimated 650,000 b/d in September.
A Venezuelan oil ministry official told Argus that Rosneft helped to clear the backlog, allowing production to recover to more than 800,000 b/d at the end of last year. If Venezuela can sustain the current export clip, output could rebound further in coming months, although it is unlikely to meet Maduro's 2mn b/d ambitious target.
Rosneft is the main lifter of Venezuelan oil since the oil sanctions took effect a year ago, eclipsing Chinese state-owned CNPC that dropped out of direct liftings in mid-2019 in spite of its ongoing blending partnership with PdV at PetroSinovensa.
Rosneft's springboard for Venezuelan supply is its PetroMonagas joint venture with PdV, one of four integrated Venezuelan extra-heavy crude upgrading projects that were nationalized by the government in 2007. PetroMonagas was built by ExxonMobil and used to be known as Cerro Negro before the watershed government seizure.
Rosneft is a minority partner in PetroMonagas, but the company quietly assumed an operating role last year. The upgrading plant is off line because of equipment problems, but Rosneft is utilizing the facility's storage tanks to blend 8-10°API Orinoco crude with Venezuela light and medium grades to produce 16°API Merey, which is favored by Indian and Chinese refiners. For PdV and Rosneft, blending produces the same Merey quality yield as upgrading would do if the PetroMonagas plant were operating.
The only upgrader currently operating at Jose is PetroPiar. Unlike the idle PetroMonagas units, the stripper at PetroPiar was still utilized during the blending phase to remove naphtha from DCO before it was mixed with lighter supply to produce Merey. The upgrader is currently producing about 118,000 b/d of Hamaca, according to internal PdV data.
PdV's wholly owned Petro San Felix uprading project, formerly PetroZuata of ConocoPhillips, has been down for years.
By Patricia Garip
Related news posts
US restricts future oil leasing in NPR-A
US restricts future oil leasing in NPR-A
Washington, 19 April (Argus) — President Joe Biden's administration today finalized a rule to prohibit future oil leasing on nearly half of the 23mn-acre National Petroleum Reserve in Alaska (NPR-A), adding to a flurry of recent environmental regulations that have frustrated oil interests. The rule will make it harder for oil producers to expand beyond development in the northeast section of NPR-A, where ConocoPhillips is developing its $8bn Willow drilling project. The rule outright bans new leasing on 10.6mn acres of the reserve, including around the ecologically sensitive Teshekpuk lake "special area" that is believed to hold large volumes of crude. The rule also restricts future leasing on an additional 2mn acres in the NPR-A that includes other special areas. "These natural wonders demand our protection," Biden said. "I am proud that my administration is taking action to conserve more than 13mn acres in the western Arctic." The US Bureau of Land Management (BLM) said it received more than 100,000 comments on its proposal to limit oil leasing in the NPR-A, a federal area established in 1923 where commercial oil production began only in 2015. The restrictions came after former president Donald Trump tried to increase drilling in the NPR-A through a plan to allow leasing on an additional 7mn acres, including around Teshekpuk lake. With the rule complete, BLM said it plans to solicit input on whether to revise the boundaries of the "special areas" and identify additional lands in NPR-A that could qualify for protection. Biden administration officials previously described the rule as creating a "one-way ratchet" for conservation that a new administration could not reverse. The rule will not affect existing oil and gas leases in NPR-A, including Biden's decision in 2023 to approve the Willow project, which is expected to reach a peak output of 180,000 b/d and that environmentalists strongly opposed. BLM said the 10.6mn acres of NPR-A that it closed to leasing has only medium or low potential for oil and gas resources. Environmentalists cheered the new NPR-A restrictions, with Sierra Club executive director Ben Jealous calling it a "major victory" for the arctic. But oil industry groups say the restrictions are a step in the wrong direction, adding to other recent regulations they say will make it hard to produce energy on federal land. BLM recently finalized more stringent bonding requirements for onshore and offshore land, in addition to finalizing a plan to lease federal land for conservation. "This misguided rule from the Biden administration sharply limits future oil and natural gas development in Alaska's National Petroleum Reserve, a region explicitly intended by Congress to bolster America's energy security," American Petroleum Institute senior vice president of regulatory affairs Dustin Meyer said. The administration has been working to finish regulations in recent weeks ahead of an upcoming deadline where any rule could be subject to "disapproval" in 2025 under the Congressional Review Act. The exact deadline remains in flux because it depends on how long the US Congress stays in session, but it could arrive as early as next month. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Limited strike on Iran opens door to de-escalation
Limited strike on Iran opens door to de-escalation
Dubai, 19 April (Argus) — A limited aerial assault on the central Iranian city of Isfahan earlier today could mark the beginning of the end of the latest escalation in the Mideast Gulf. Iranian state media reported in the early hours of Friday, 19 April, several explosions over Isfahan at 04:00 local time. These were later confirmed by the Iranian military to have been the result of air defences bringing down three small drones over the city. Isfahan is the home to a number of strategically important facilities, among them the Shekari airbase that houses some of Iran's F-14 Tomcat fighter planes and SU-24 Sukhoi bombers, and a uranium conversion facility. There was "no impact or damage" to either, according to Iranian army commander-in-chief Seyyed Abdolrahim Mousavi. Other Iranian officials also sought to downplay the strike. Hossein Dalirian, spokesman for Iran's National Center for Cyberspace, said on social media platform X that it was so minor "it would not be considered an attack anywhere in the world." Ice Brent crude futures rose by nearly $3/bl earlier today, but are now trading below the previous settlement level. Iran and the wider Mideast Gulf region were on high alert as Israel weighed its options for a response to Tehran's assault on Israeli territory last weekend. That attack, involving more than 300 drones, ballistic missiles and cruise missiles, was the first ever direct assault on Israel from Iranian territory. As yet, there has been no official confirmation from either side that today's attack originated from Israel. Media reports quoted unnamed US and Israeli officials saying Israel had launched the drones, and Oman's foreign ministry condemned Israel "for its attack this morning on Isfahan". Iran's attack on Israel last weekend was itself in response to a suspected Israeli air strike on an Iranian diplomatic compound in the Syrian capital, Damascus, at the start of April. That killed seven members of Iran's powerful Islamic Revolutionary Guard Corps (IRGC), including two generals. Despite its magnitude, the Iranian retaliation was not only highly choreographed, but also telegraphed to key stakeholders beforehand in an effort to limit damage and casualties. Israel said immediately after the attack that almost all of Iran's drones and missiles were intercepted with the help of allied forces in the region and that there were no fatalities, only "light" damage to the Nevatim military base in Israel's Negev desert. De-escalatory strike The limited nature of Iran's strike prompted Israel's western allies to urge it to show restraint. The US appealed to Israeli prime minister Benjamin Netanyahu to "take the win" and claim victory for its defence. But as it became increasingly clear that a response without a military dimension would be unpalatable for Israel, the US and Europe turned their efforts to making sure whatever Israel chose to do was also limited and fell below a threshold that could trigger yet another escalation in tensions. "This was probably the level of attack that on one hand was necessitated by internal Israeli calculations within the security cabinet and broader political coalition, and by virtue of the pressure by allies and what the US was willing to countenance," said Geneva Graduate Institute senior research associate Farzan Sabet. "It was a limited strike with the message that we can hit you anywhere, anytime, and without having to resort to a major strike involving 300-plus missiles." In the days following Iran's attack on Israel, several key IRGC figures said Tehran had "decided to create a new equation with Israel" ꟷ specifically that Tehran would retaliate to any Israeli attack on its interests or citizens from Iranian territory. This would be a shift from the previous status quo, which would see Israel regularly target Iranian interest and officials in third countries, many times without response from Tehran. But the limited nature of Israel's latest attack, and the very concerted effort by Iranian officials, military personnel and media to downplay its severity and impact so far, suggests it could feasibly provide a de-escalatory off-ramp for Iran. "Should Israel's response be limited to this, the Islamic Republic will not be under pressure to retaliate," said Arab Gulf States Institute senior fellow Ali Alfoneh. But is too early to say whether today's incident is the totality of Israel's response. "We're running up to [the Jewish holiday of] Passover [on 22-30 April]. The Israelis may not have wanted to carry out a major retaliation ahead of Passover so as to avoid the threat of war hanging over the country during the holiday," Sabet said. "So it is very possible that more [retaliatory attacks] could come after Passover." By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Karoon cuts 2024 guidance on lower US output
Karoon cuts 2024 guidance on lower US output
Sydney, 19 April (Argus) — Australia-listed oil producer Karoon Energy has cut its production guidance for 2024 to reflect lower production from its stake in the Who Dat floating production system in the US' Gulf of Mexico. Who Dat's weaker well and facility performance has led to the lower guidance, with Karoon now expecting to produce 29,000-34,000 b/d of oil equivalent (boe/d) in 2024, down from a previous 31,000-37,000 boe/d guidance. Karoon said it and joint-venture partner LLOG Exploration will continue to prioritise higher value oil production over gas for the remainder of the year. The firm's January-March output rose by 17pc against October-December 2023 . Who Dat's production on a net revenue interest (NRI) basis was 9,000 boe/d for January-March, with Karoon downgrading its forecast NRI production from 4mn-4.5mn boe in 2024 to 3-3.5mn boe. But output from Karoon's Bauna asset offshore Brazil was 15pc lower than the previous quarter because of continuing reliability problems with Bauna's floating production, storage and offloading (FPSO) vessel, the shut-in of the SPS-88 well for the full period and natural field decline. Production for January-March at Bauna was 24,000 b/d, down from 28,000 b/d the previous quarter. Karoon expects to resume production from the well during July-September following an intervention, assuming no delays in regulatory approval. Bauna's annual maintenance will take place next month with a three-week shutdown of the FPSO planned to boost reliability. By Tom Major Karoon Energy results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Sales revenue ($mn) 197 209 144 37 -6 Production (b/d) 34,000 29,000 22,000 55 17 Sales volume (b/d) 30,000 28,000 22,000 36 7 Average prices ($/bl) Bauna oil price 76 83 73 4 -8 Who Dat sales gas ($/mn ft³) 2.95 2.22 n/a n/a 33 Who Dat oil, condensate, NGLs 78 73 n/a n/a 7 Source: Karoon Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Woodside records weaker Jan-Mar LNG output
Australia’s Woodside records weaker Jan-Mar LNG output
Sydney, 19 April (Argus) — Australian independent Woodside Energy's January-March output dropped against a year earlier and the previous quarter, as reliability fell at its 4.9mn t/yr Pluto LNG project offshore Western Australia. Woodside produced 494,000 b/d of oil equivalent (boe/d) across its portfolio for January-March, 5pc below the 522,000 boe/d reported during October-December and 4pc below its 2023 full-year figure of 513,000 boe/d. Lower production at its Bass Strait, Pyrenees and Pluto assets was partially offset by increased production at the 140,000 b/d Mad Dog phase 2 oil field in the US Gulf of Mexico, which hit peak production of 130,000 b/d during the quarter. Reliability at Pluto was 94.6pc for the quarter because of an offshore trip and an onshore electrical fault. Woodside made a final investment decision (FID) on the Xena-3 well to support Pluto production during the quarter. The 16.9mn t/yr North West Shelf (NWS) LNG achieved 97pc reliability for the quarter with NWS' joint-venture partners taking a FID on the Lambert West field, which will support continuing production. Lower seasonal market demand and offshore maintenance activity saw production drop at the firm's Bass Strait fields, while production ended at the Gippsland basin joint venture's West Kingfish platform because of slowing oil output from Kingfish field. The Pyrenees floating production storage and offloading vessel began planned maintenance in early March and will return to crude production for April-June, Woodside said. Two 550,000 bl cargoes of Pyrenees crude loaded each quarter during 2023. Revenue dropped by 31pc to $2.97bn from $4.33bn a year earlier and 12pc from $3.36bn during October-December. Woodside's total average realised price dipped to $63/boe, 6pc down on the previous quarter's $67/boe and 26pc below the year-earlier figure of $85/boe. Woodside's average realised price for LNG produced was $10.40/mn Btu or 10pc down on the previous quarter's $11.50/mn Btu. The firm is more heavily exposed to spot prices and gas hub pricing than fellow domestic LNG producer Australian independent Santos, with about 30pc of Woodside's equity-produced LNG sold at these spot prices. By Tom Major Woodside LNG production (mn boe) NWS Pluto Wheatstone* Total Jan-Mar '24 8.2 11.8 2.4 22.3 Oct-Dec '23 7.8 12.4 2.5 22.7 Jan-Mar '23 9.7 12.2 2.5 24.3 2023 32.8 45.6 10.2 88.6 2022 29.7 46.2 9.2 85.1 y-o-y % ± -15 -3 -4 -8 q-o-q % ± 5 -5 -4 -2 Source: Woodside *Woodside controls a 13pc interest in Wheatstone LNG Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more