CARACAS: Petroleos de Venezuela (PDVSA) has asked oil suppliers to submit offers to sell the South American country up to 70,000 barrels per day of ultra-light sweet crudes through contracts of one to five years, potential bidders said.
If successful, the move would mark the most definitive step state-owned PDVSA has taken to obtain longer-term supplies of ultralight crude, which it needs to use as a diluent for its growing output of extra heavy oil.
PDVSA bought some 4 million barrels of Algeria’s Saharan Blend light crude from October 2014 through January of this year under an agreement with state-run Sonatrach. That deal ended after disagreements over prices and delivery terms, forcing PDVSA to resume production of less attractive blends made with imported naphtha.
Under its new strategy, PDVSA would guarantee a source of light crude for the coming years in the vast Orinoco belt, home to most of the country’s reserves. Even though the OPEC-member nation has the world’s largest oil reserves, it does not produce enough light, sweet crude.
“PDVSA will receive offers until July 27. Only producing companies were invited,” said the source, who added that Anglo-Dutch Royal Dutch Shell and Chevron Corp are on the list.
In the meantime, PDVSA recently has been buying Nigerian crude to use as diluents, according to traders.
The first 1-million-barrel cargo bought from Shell arrived on the Caribbean island of Curacao at the end of last month and another two vessels of the same size are waiting to be unloaded, according to ThomsonReuters vessel tracking data.
Another trader added that a document containing the terms of the deal says the crude must be 40 API degrees of density or lighter. The company is not willing to accept offers of condensates.
But that source said some of the terms are flexible, including the amount and size of the cargoes to be received per month at Venezuelan ports.
Traders said Shell and Exxon Mobil Corp are in a good position to offer Nigerian light, sweet crudes to Venezuela.
It is still not clear if PDVSA would accept offers of shale crudes including Eagle Ford crude, which would meet the terms and save money in freight costs.
PDVSA recently said it was in conversations with other OPEC countries such as Algeria, Angola, Iran and Nigeria to find light crude supplies.
