Shell conducts maiden VLCC transfer at Acu

Brazil's top private-sector oil producer Shell conducted its first transshipment operation with a China-bound VLCC at the Acu port in Rio de Janeiro, terminal operator Acu Petroleo said.

The Wasit VLCC was loaded with 2mn bl of pre-salt crude from two dynamic shuttle tankers on 11-14 June. The cargo of Lula crude is expected to arrive at Qinzhou port in southern China on 25 July, according to vessel tracking data.

Shell's Lula partner, state-controlled Petrobras, recently touted robust Chinese demand for light sweet pre-salt grades with characteristics similar to Chinese grades such as Shengli.

In May, Shell was the second-largest producer in Brazil behind Petrobras with a net take of around 344,700 b/d of crude—mostly from working stakes it holds in the Lula and Sapinhoa fields.

Shell inherited a 20-year STS agreement with Acu when it acquired BG in 2016. The firm also exports crude through STS operations off the coast of La Paloma, Uruguay.

Driven by a recovery in Chinese refinery runs, Petrobras posted a crude export record of 1mn b/d in April. But a renewed outbreak of Covid-19 in Beijing has cast doubt on whether China will sustain higher run rates in the near term.

Earlier this week, Petrobras more than doubled the volume of crude it can ship at Acu through March 2021 to 100mn bl from 48mn bl. But the company has said crude exports could be reduced in favor of higher-margin fuel exports, namely low-sulfur marine fuel, in the coming months.

After dropping significantly in the first quarter, China's share of Brazilian crude exports regained ground in recent months.

According to data from Brazil's foreign trade ministry, around 54pc of receipts from crude exports in January-May 2020 came from China, down from almost 64pc in the same period of 2019.

In terms of volume, China's share of exports in May was around 67pc, up from almost 53pc in the same period of 2019.

Amid weakened domestic demand because of the pandemic, Petrobras has looked to the US, Europe and other Asian countries to pick up the slack. The Netherlands, Portugal and Spain have each increased their take of Brazilian crude, as have India, Singapore and South Korea, in recent months.

The 1.2mn b/d offshore oil terminal at Acu is now handling around 25pc of crude exported from Brazil, including transshipment services for other European oil producers such as Galp, Equinor, Total and Repsol.

By Nathan Walters