November 25, 2013 / 4:43 PM / 4 years ago

PDVSA's oil exports to Citgo decline, U.S. oil firms buy more -EIA

4 Min Read

HOUSTON, Nov 25 (Reuters) - Venezuela's state-owned oil company PDVSA is sending less of its crude to its U.S. unit Citgo and some of the slack is being picked up by other U.S. oil firms such as Valero Energy and Chevron , according to the Energy Information Administration.

Along with mostly crude shipments, Petroleos de Venezuela (PDVSA) used to send some intermediate products for Citgo's 750,000 barrel per day (bpd) refining network but it has not shipped its unit any feedstocks this year, latest EIA data through August shows.

The decline stems in part from a series problems PDVSA has had with its domestic refinery network since 2012 and assets sales Citgo made starting in 2005 of two East Coast asphalt plants and a partnership at a refinery in Texas.

Though Citgo is still the biggest buyer of PDVSA oil in the United States, it received an average of 189,500 bpd of Venezuelan crudes in the first eight months of 2013, a 26 percent drop from 257,500 bpd in 2012, according to the EIA.

The subsidiary, which runs its 167,000 bpd Lemont refinery in Illinois with Canadian crudes because of proximity and costs, did not receive any product cargoes during 2012 or 2013. In 2011, it bought nine cargoes of unfinished oils from Venezuela.

The United States as a whole is receiving a declining volume of Venezuelan crude and products as PDVSA works to ship more of its oil to Asia as part of a diversification strategy. India and China together already receive more than 1 million bpd from Venezuela.

According to the EIA, PDVSA and its private partners have sent 791,000 bpd of oil to the United States so far in 2013, compared with 1.53 million bpd eight years ago.

PDVSA and Citgo officials were not immediately available to comment.

Proximity Rules

While Venezuela's exports to the United States are falling, Valero Energy and Chevron have taken advantage of the close location of their refineries to South America and good relationships with PDVSA to increase their purchases.

Valero has been the second-largest recipient of Venezuelan oil so far this year, followed by Chevron.

Refining companies such as Valero are penetrating Latin America more aggressively, buying larger volumes of crudes from the region and then selling back refined products, according to traders.

Refineries where Citgo had stakes until it sold them to private U.S. companies, such as NuStar and Lyondell Chemical , are also buying less Venezuelan oil as cheaper U.S. crudes become available.

NuStar Energy announced this month the early termination of a 30,000 bpd supply contract of Venezuelan crude with PDVSA, which will allow the company to buy cheaper Canadian crudes.

The 270,000 bpd Houston Refining on the Gulf Coast in Texas is also running different foreign crudes after the expiration in 2012 of a supply contract inked with PDVSA when Citgo left the facility in 2006.

Both companies have pared back purchases to become occasional buyers of Venezuelan crudes on the open market, receiving three to four monthly cargoes each from PDVSA, compared with up to seven monthly cargoes in 2011-2012 .

Other PDVSA affiliates in the United States are also receiving less Venezuelan crudes. That is the case of the 192,500 bpd Chalmette refinery with Exxon Mobil and also Hovensa, a 350,000 bpd refinery with Hess in the Virgin Islands that used to buy more than 100 cargoes of Venezuelan crude per year, but stopped working in 2012.

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