The logo of Petroleos de Venezuela SA appears in front of the PetroChina logo. (Reuters)
[Financial Channel/Comprehensive Report]PetroChina plans to resume imports of Venezuelan oil after a four-year hiatus due to US sanctions. “Reuters” quoted four people familiar with the matter as saying that China’s PetroChina (601857.SS) has proposed to purchase up to 8 million barrels of Venezuelan crude oil per month. The crude oil will come from the state-owned oil company PDVSA, hoping to restore the level of Venezuelan crude oil that existed four years ago due to U.S. sanctions. disrupted bilateral oil trade.
PetroChina, China’s second-largest refiner, is reportedly paying for 265,000 barrels per day of Venezuelan crude in yuan through a joint venture with PDVSA, which will allow them to rebuild cash flow and funds for investment in production.
PetroChina’s payment proposal also includes opening a credit line or letter of credit, but PDVSA wants any new deals to be paid in cash upfront or through an oil exchange.
People familiar with the matter said that PDVSA said in response to CNPC’s proposal that it was “impossible to immediately fulfill the commitment of 26.5 barrels per day.” The new amount of crude oil supplied to PetroChina may account for two-thirds of Venezuela’s current oil supply sold to China’s small “teapot” refineries.
A person close to PetroChina said that before the sanctions, PetroChina purchased as many as six batches of 2 million barrels of Venezuelan oil per month.
Venezuela’s crude oil production has increased slightly so far this year to 780,000 barrels per day, but is still well below this year’s annual target of 1 million barrels. Venezuelan oil exports to China have averaged 430,000 barrels per day this year, according to PDVSA documents and tanker tracking data.
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