Venezuela Considers Importing Crude for the First Time

PDVSA would use its own fleet to transport imported crude; Purchases of crude imports would reduce costs; Venezuela has been exporting oil for a century

Venezuela is considering importing crude oil for the first time ever and could use a light oil from its partner in OPEC, Algeria, to dilute their own heavy crude, according to a company document seen by Reuters accessed on Wednesday.

Despite having the largest oil reserves in the world, in recent years Petróleos de Venezuela (PDVSA) has been buying increasing amounts of heavy naphtha for blending with the extraction of heavy crude in the Orinoco Oil Belt, the largest producing region .

These blends are made to convert the extra-an exportable product, amid the decline in local production of medium and light crude oils previously used as diluents and delays in construction of new breeders that can change the quality of the crude.

Purchases of naphtha PDVSA have been doing at high prices on the open market, which hit its cash flow and affects the main source of income of the socialist government of Nicolas Maduro.

"(The Department of) Commerce (PDVSA) assesses the recent strategy of importing Algerian Saharan Blend crude," says the document, which studies the transportation costs for imported oil.

PDVSA recently told its foreign partners in Venezuela was holding negotiations with the Algerian state Sonatrach to acquire raw said a source close to the companies.

The state did not immediately respond to requests for information from Reuters.

Oil Minister Rafael Ramirez said earlier this year that PDVSA could rely on imports of light crude as "last resort" to provide sufficient diluent to its extra-heavy crude, but gave no further details.

These crude imports would be less expensive if done through a supply contract, compared with purchases of gasoline.

The South American country has been a significant oil exporter for nearly a decade. Last year it sold in the international market an average of 2.43 million barrels per day (bpd) of crude oil and derivatives, according to figures from PDVSA.

Venezuela and Algeria have been close allies in OPEC, although their state oil companies have never been formally associated.

TRIMMING COSTS

The document adds that PDVSA plans to use its own fleet to import crude oil, including large-capacity tanker VLCC (Very Large Crude Carriers) which recently entered service.

The state is trying to expand its own to cut transportation costs, especially on very long routes such as China and India fleet.

Last year, PDVSA held talks with US-based Valero Energy (VLO) to restart five units of the refinery in Aruba and heavy naphtha produced there, but neither this nor other strategies to reduce import costs has paid off.

Mix with light heavy crude would result in a commercial product for PDVSA. Your current crude blends with gasoline, known as diluted crude (DCO) have few buyers, so they are mostly sent to your refining unit in the United States, Citgo Petroleum.

DCO production gained because PDVSA and half a dozen foreign partners, including Chevron (CVX), Italy's ENI and Spanish Repsol, face delays in the construction of breeders that would make one extra-heavy oil lighter with increased demand.

The imported oil would give relief to PDVSA and its partner while they culminate breeders.

Other Latin American producers like Mexico and Argentina also study start importing light crudes or condensates that are widely available in the market and Reduced price.

The Saharan Blend is a light sweet crude of 45 degrees API. Transported to Venezuela takes about 20 days and if you use your own fleet, PDVSA could save about $ 3 million in freight shipment, the document says.

(Reporting by Marianna Parraga. Edited by Monica Vargas)