(Updates with exports figures, information about inventories)
By Marianna Parraga
HOUSTON Aug 29 Venezuela's state-run oil
company PDVSA has put on hold plans to export diluted crude oil
(DCO) in October while it reviews rising production costs as a
result of imports of pricey naphtha that it uses to mix with
extra heavy crude, traders told Reuters on Friday.
The move comes as the company scrambles to cut costs to
partially solve its cash flow problems. Reuters reported on
Wednesday that PDVSA is considering importing Algerian Saharan
Blend light crude instead of costly naphtha that it has been
buying since 2013 to use for its blends..
One of several sources who was told of the halt by the
company said it might also try to raise DCO prices to better
offset import costs.
"Sales of DCO are suspended, but PDVSA said it won't stop
production of these crudes. It will use its facilities in the
Caribbean to store them and it is even considering to use
tankers for storage," one source said.
PDVSA has two storage facilities in Curacao and rents tanks
in Aruba and the island of Saint Eustatius from U.S. oil firms
Valero Energy and NuStar Energy. From there, it
loads very large crude carriers (VLCC) to Asia.
Most of the diluted crude oil produced by PDVSA is absorbed
by its U.S. refining arm, Citgo Petroleum, but other firms such
as Valero and Chevron also receive cargoes regularly.
The state-run company sent 4.99 million barrels of diluted
crude oil in August to the United States - some 166,000 barrels
per day - in ten cargoes, according to Reuters Trade Flows data.
Seven cargoes were received by Citgo's refineries in Lake
Charles and Corpus Christi and the rest were unloaded by Chevron
It is still not clear if putting DCO exports on hold will
lead to a drop in naphtha purchases.
PDVSA recently awarded to firms Petrochina, Delaney and
Noble Group a tender launched in July to import at
least four 500,000 barrel cargoes of heavy naphtha for
With the world's largest reserves of crude, Venezuela's
plans to start importing foreign crude have shocked the OPEC
The Venezuelan company did not immediately answer requests
Another source added that PDVSA has not sent to its
customers its export plan for October.
The export plan for September, including DCO shipments to
different clients, will be honored, the sources added. PDVSA has
plenty inventories of DCO in Saint Eustatius, the source added.
PDVSA does not disclose its monthly production and export
(Reporting by Marianna Parraga; Editing by Terry Wade, Phil
Berlowitz and Diane Craft)