After the US arrested Venezuelan President Nicolas Maduro, large oil and gas companies are urgently discussing finding oil tankers and establishing operations to transport crude oil from Venezuelan ships and ports, 4 sources familiar with the matter revealed.
Trading companies and oil and gas companies, including Chevron, Vitol and Trafigura, are competing to reach agreements with the US government on crude oil exports from Venezuela after President Donald Trump announced that Venezuela would have to deliver up to 50 million barrels of sanctioned oil to the US.
Trafigura informed in a meeting with the White House on January 9 that the company's first ship is expected to load cargo next week.
Facing the US blockade in recent months, Venezuela has stored oil in oil tankers and has almost filled oil tanks on land. These oil tankers are old, poorly maintained and are being punished.
However, even if licensed by the US, other ships cannot directly contact the ships sanctioned due to legal liability and insurance requirements.
Crude oil tanks on the shore have also not been maintained for many years, posing a risk if the parties seek to unload oil.
Among the companies seeking to expand oil transfer activities between ships in Venezuela are the maritime transport company Maersk and American Eagle Tankers.
Maersk can replicate the logistics model from ships to shore and then to ships that the company used to use in Amuay Bay in Venezuela. Maersk has also operated in Aruba and Curacao, islands whose seas are often used to transport Venezuelan oil.
However, although oil transfer can be carried out in Aruba and US ports, the cost is higher.
A transportation source said that transshipment activities will also become more complicated due to the lack of smaller ships to transport oil from tankers to ports, from which oil can be transferred to other ships. In addition, maintenance of machinery and equipment is also not adequate.
AET, a company that is supporting the transfer of Venezuelan crude oil shipments from Chevron to the US, is being approached by potential customers to expand its capabilities in this field, the two sources noted.
Although the supply may reach 500,000 barrels of oil/day as Venezuela once exported to the US before being sanctioned and the accumulated inventory released within 90-120 days, it will be very difficult to achieve this goal if it is necessary to take oil from both oil tankers and onshore storage facilities.
Companies are also fiercely competing to seize cargo handling space at Venezuela's main Jose oil port, which has limits on capacity and speed.
Chevron, an important joint venture partner in Venezuela, is also actively competing to maintain its priority position at Venezuelan ports, while arranging the company's fleet, a source said.
Oil and gas companies, including Chevron, Vitol, Trafigura, have been and are looking for naphtha supply, a source in the industry in Venezuela revealed. Naphtha is often mixed into Venezuelan heavy crude oil to reduce density, making transportation and processing easier at refineries.
