India sticks to Venezuelan crude, stops products sales

Exports total more than 300,000 b/d, and Reliance and Nayara Energy pledge to keep buying despite US sanctions

India's two leading refiners will keep importing Venezuelan crude but will no longer supply oil products to Venezuela's state-owned PdV because of recently imposed US sanctions, Indian downstream executives say. "We will continue to buy Venezuelan crude until the US stops us," one of the executives says.

Private-sector firm Reliance and Russian state-controlled Rosneft's Indian refining unit Nayara Energy have been leading buyers of Venezuela's heavy sour crude in recent years. They have combined crude processing capacity of 1.76mn b/d.

Indian imports of Venezuelan crude reached a monthly high for 2018 of nearly 400,000 b/d in November, before falling close to 200,000 b/d in December, according to Indian customs data.

Reliance in particular is a regular buyer of PdV's Merey and diluted crude oil (DCO) grades, and was a steady supplier of products, especially naphtha that is used as a diluent in DCO. But Reliance routed the product sales through its US subsidiary, exposing it to the new sanctions that cut off US sales of diluent to PdV from the end of January. The sanctions apply to non-US firms that use the US financial system or US brokers.

PdV's crude sales to Nayara service oil-backed debt to Rosneft. And the Venezuelan firm is slowly paying overdue upstream dividends to Indian state-controlled ONGC by nominating crude buyers to pay ONGC for shipments instead of PdV.

The Indian executives made their remarks at this month's Petrotech 2019 oil and gas conference in India, where Venezuelan energy minister and PdV chief executive Manuel Quevedo pledged to keep crude flowing despite the sanctions.

"We have a good relationship with India and we want to continue this," Quevedo says. "India certainly has a good and healthy relationship with us." Venezuela plans to double exports to India from over 300,000 b/d now, he says.