Second cargo of Venezuelan crude heads to Spain

One cargo of almost 1mn bl of Venezuelan crude is close to arriving in Spain and a second one has loaded in the South American country as part of the resumption of a crude-for-debt deal with Spain's Repsol and Italy's Eni.

The Africa Suezmax tanker is expected to arrive on 26 November to the port of Cartagena, Spain, with 993,600 bl of crude it loaded at Venezuela's Jose terminal on 10 November, according to oil analytics firm Vortexa. The Gladiator Suezmax, carrying 934,300 bl of crude, left the Jose terminal on 21 November and is expected to arrive on the opposite, northern side of Spain in Bilbao on 6 December. Dynacom Tankers owns both ships.

Both shipments had been expected to go to Repsol's 220,000 b/d Bilbao refinery in Spain, as Repsol had planned to acquire Eni's share of the deliveries. Repsol's refineries are better suited to process Venezuela's heavy, sour grades.

Venezuela's state-owned PdV has an agreement to send crude cargoes to Repsol and Eni as repayment related to gas sales from their 50:50 Cardon 4 venture in Venezuela.

But Venezuela's declining crude production had left little excess, and these are the first such shipments since 6 July.

PdV's output has risen in recent months, boosted by shipments of condensate from Iran used as diluent for Venezuela's heavy grades.

PdV's output rose to 765,000 b/d in October from about 600,000 b/d in September, according to Argus and independent estimates. But oil company representatives working with PdV caution that most of the increase is fully dependent on continuing shipments of condensate that are part of a political agreement with Iran.

PdV officials had touted the renewed shipments in a recorded message to employees.

"We have signed preliminary agreements with Eni from Italy and Repsol from Spain to help move all of this move along," an unidentified PdV official said in late October. "European countries have approached us, evaluating their options ... with winter coming in Europe."

By Carlos Camacho