Venezuela begins imports of Iranian heavy oil for refining, PDVSA documents

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PDVSA’s oil output decreased in July after an upward trend in recent months, according to the latest OPEC report. (Carlos Garcia Rawlins/Reuters)

USA / VENEZUELA, (Reuters) – Venezuela has begun importing Iranian heavy crude to feed its domestic refineries, documents from the state-run oil company PDVSA showed, a deal that widens a swap agreement signed last year by the US sanctioned countries.

The two nations last year initially agreed to a swap deal, with PDVSA importing Iranian condensate to dilute and process its extra heavy oil for export. In return, Venezuelan crude is being shipped via the National Iranian Oil Company (NIOC).

Iran’s heavy crude, which is similar in quality to Venezuela’s Mesa 30 crude, is set to augment domestic oil fed to PDVSA’s refineries, according to the documents.

As part of the cooperation pacts, Venezuela in recent years has received Iranian equipment to revamp its refineries. The 146,000-barrel-per-day El Palito refinery is restarting a crude distillation unit this week after extensive repairs and upgrading that relied on equipment imported from Iran.

PDVSA did not immediately reply to a request for comment.

Iran’s Oil Minister Javad Owji traveled to Venezuela last week to meet President Nicolas Maduro and discuss trade agreements with his counterpart, Tareck El Aissami.

At least 200,000 barrels of Iranian heavy crude were delivered in mid-April to the 310,000-bpd Cardon refinery, Venezuela’s second-largest. Another 400,000-barrels of Iranian oil, which arrived on the very large crude carrier (VLCC) Dino I, is discharging this week at the country’s Jose port, the documents showed.

The Dino I is scheduled to set sail later this month carrying Venezuela fuel oil for NIOC unit Naftiran Intertrade Co, according to one of the documents.

The Middle Eastern country also continues supplying PDVSA with condensate. Venezuela-owned tanker Maximo Gorki is set to discharge some two million barrels of condensate at Jose, and Iran-flagged Derya is in Venezuelan waters waiting to deliver its cargo, service TankerTrackers.com said.

As its oil output becomes heavier, Venezuela struggles to source medium and light grades for its refineries, contributing to limited production and intermittent scarcity of motor fuels.

The South American country also increasingly needs lighter crudes or refined products to turn its extra heavy oil output into exportable grades.

Reporting by Marianna Parraga in Houston, additional reporting by Mircely Guanipa in Maracay and Tibisay Romero in Valencia; editing by Gary McWilliams and Marguerita Choy.

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