How Venezuela’s PDVSA Exports Crude Oil to Cuba

How Venezuela's PDVSA Exports Crude Oil to Cuba
June 15, 2015
Jorge R. Piñon*

HAVANA TIMES- Recent press and financial institutions reports indicate
that Venezuela has substantially cut back petroleum deliveries to Cuba
under the terms and conditions of the October 2000 Convenio Integral de
Cooperación Venezuela-Cuba CIC barter agreement.

The context and data sources used in these reports by which they reached
these conclusions are incorrect.

Yes, PDVSA has reduced the volume of Mesa 28 crude oil exported from
Venezuela to Cuba; but it has been replaced by a similar volume of crude
oil and petroleum products from its Caribbean transshipment terminals of
Bonaire, St. Eustatius, Aruba and Bullen Bay and Willemstad, Curacao.

PDVSA lacks the heavy crude oil upgrading capacity at its Jose
industrial complex in Northern Venezuela necessary to convert Orinoco
production into marketable light synthetic crude oil, much needed to
cover its contractual commitments to China and India.

As a result, PDVSA is using some of its own declining light and medium
domestic crude oil production, such as Mesa 30-28 crude oil, and for the
first time in its history it is also purchasing foreign crudes such as
Algerian Saharan Blend and Russian Urals, as diluent and blending stock
for their Orinoco heavy crude.

Therefore analysts and researchers that follow oil tankers traffic from
Venezuela to Cuba have now also to monitor marine movements between
Caribbean transshipment oil terminals and Cuba in order to validate and
account for total crude oil and petroleum products deliveries by
Venezuela to Cuba.

Our analysis, including that of tanker movement reports, indicate that
for 2014 and 1Q-2015 crude oil and petroleum products deliveries by
Venezuela to Cuba are still in the average range of 80-90,000 barrels
per day under the CIC barter agreement. (See Attachments) Monthly volume
fluctuations will occur as a result of refinery unit maintenance
(December-January) and hurricane threats when normal working inventory
levels increase.

It is important also to note that the Cienfuegos CUVENPETROL joint
venture has been processing and blending crude oil and petroleum
products for sale to third parties, and these volumes are not part of
contractual deliveries by Venezuela to Cuba under the CIC barter
agreement. These arms-length commercial transactions are also often
misrepresented as the re-sale by Cuba of Venezuelan crude oil deliveries
under the CIC barter agreement, which is not the case.


(*) Jorge R. Piñon, Director
Latin America and Caribbean Program
The University of Texas at Austin – Jackson School of Geosciences
jrpinon@austin.utexas.edu

Source: How Venezuela's PDVSA Exports Crude Oil to Cuba - Havana
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