Indian refiners mull Venezuelan crude shift
Refiners in India are examining their feedstock options after the US announced yesterday that it will impose sweeping sanctions on Venezuela´s state-owned oil company PdV.
Secondary sanctions on non-US buyers are of particular concern to India, which accounted for around 40pc of Venezuelan crude exports by destination in November 2018.
The US action cuts off US sales of diluent to Venezuela and a key supply of heavy, sour crude to the US Gulf coast, where the market is already tight because of production caps recently imposed by Canada´s Alberta province.
Diluent in the form of naphtha is critical to transporting and marketing Venezuela's extra-heavy crude from the Orinoco oil belt, a vast deposit where PdV has integrated joint ventures with Chevron, Rosneft, Total and Equinor.
According to guidance documents issued by the US Treasury Department, existing PdV customers can continue taking Venezuelan supply until 28 April. As for new business, US banks are immediately instructed not to process any fund transfers between PdV and its non-US counterparties for an initial period until 29 March.
Indian imports of Venezuelan crude reached a monthly high for 2018 of nearly 400,000 b/d in November, before falling back to 203,000 b/d in December, according to Indian customs data.
India imported 351,000 b/d of Venezuelan crude in October. Over the past two years, imports from Venezuela had peaked at 445,000 b/d in August 2017.
Venezuela exported an estimated 1mn b/d of crude in November and December 2018.
The Venezuelan crude that reaches the Indian market is comprised of 16°API Merey blend and diluted crude oil (DCO), which is a blend of 8-10°API Orinoco crude and 30pc naphtha.
The main Indian buyers are domestic refiner Reliance Industries and Russian state-controlled Rosneft´s Indian refining arm Nayara.
The US remains the top destination for Venezuelan crude, accounting for 500,000 b/d in October 2018, according to the latest data from the US Energy Information Administration (EIA). US buyers are led by Valero; Citgo, the US refining arm of Venezuelan state-owned PdV; Chevron; and PBF Energy.
China alternates with India for second place in the market for Venezuelan crude. Part of the Chinese shipments goes toward servicing oil-backed debt.
Similarly, Rosneft´s share of the Venezuelan crude is earmarked for debt payment.
According to internal PdV estimates obtained by Argus, as little 130,000 b/d of exports generated cash for the company in November. Another 180,000 b/d were sold into the market by PdV´s Orinoco joint ventures. The balance of the export pie went toward servicing debts and barter deals for refined products, mainly gasoline. India´s ONGC is receiving part of its overdue dividend payments associated with an upstream venture with PdV in the form of crude.
source: Argus Media
Top News
Six last month
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Gold price faces worst week since 2021 as Fed signals no rate-cut rush
Gold loses some luster after Trump’s decisive win
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Hedge funds slash bullish wagers on gold over Trump election win
Resolute Mining says it will pay Mali $160 million in tax dispute
Families gather at South African mine shaft where hundreds are feared stuck underground
Higher silver supply to reduce global deficit by 4% in 2024
BHP to spend up to $14 billion on Chilean copper expansion
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
China’s germanium, gallium ban could cost the US $3.4 billion
South Africa police standoff with illegal gold miners escalates
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Resolute Mining says it will pay Mali $160 million in tax dispute
Trump chooses oil fracking boss as energy secretary
Gold loses some luster after Trump’s decisive win
