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