(Reuters) - Venezuela resumed supplying a key domestic crude to political ally Cuba this summer as the South American country’s refining output fell further, according to internal documents from state-run oil firm PDVSA seen by Reuters.
The shipments, which began in June and continued through August, totaled 4.19 million barrels of Venezuela’s Mesa 30 crude, a type used to produce fuel at domestic refineries and to blend with heavier oil for export.
Venezuela, which has supplied Cuba with oil under agreements since 2000, lacks cash to pay for needed spare parts, equipment and raw materials to reverse declining oil processing at its domestic refineries.
Crude production, the country’s lifeblood, fell again in August, pushing the OPEC-member country’s annual output to its lowest since 1950.
Since January, PDVSA has supplied Cuba with 11.74 million barrels (about 49,000 barrels per day) of crude, including foreign grades, Venezuela’s Mesa 30, heavier crudes and Diluted Crude Oil, the documents showed. The firm had paused Mesa shipments to the island last year due to a growing need of the grade at home.
PDVSA earlier this year was buying Russian Urals crude from oil traders to supply its ally. That stopped in May, the data showed, and shortly later the company resumed exports of Mesa.
PDVSA did not immediately reply to a request for comment.
The planning documents do not detail the services swapped or payments for shipments to Cuba. But they chronicle the declining state of the country’s refineries amid a lack of crude.
PDVSA’s refining network this month is expected to process 373,000 barrels per day of crude, or 29 percent of its 1.304 million bpd capacity, the documents show, down from 701,000 bpd in March.
The catalytic cracker at Cardon, Venezuela’s second-largest refinery, was halted last week after repairs were unable to keep it in service. Key processing units at the nation’s largest refinery, Amuay, also stopped operating in September due to low inventories of feedstock.
At Venezuela’s Puerto la Cruz and El Palito refineries, insufficient crude - especially Mesa - prevented units from increasing processing rates this year, the documents showed.
Puerto la Cruz will work at 36 percent of its 187,000-bpd capacity this month, and El Palito at 48 percent, the documents projected.
PDVSA’s executives have studied using foreign grades such as Urals crude for increasing processing rates at domestic refineries and cutting fuel imports, but a final decision has not been made, according to the documents.
Reporting by Marianna Parraga in Mexico City; Editing by Toni Reinhold and Dan Grebler