Page 5 - DMEA Week 42 2022

DMEA COMMENTARY DMEA

Implementing an agreement petroleum products for local use.
NewsBase did suggest recently that Venezuela Other refining projects
and Iran might start making moves to expand Owji’s words may indicate, then, that Tehran is
co-operation in the near future, especially as relieved to see this deal back on track and serv-
Russia steps up competition for access to “dark ing as a stepping stone towards further down-
fleet” tankers that can be used to deliver oil and stream agreements in other countries outside
refined fuels to market while obscuring their Iran. That is, the minister may not be hailing
origins. (All three countries have reasons to avail the start of processing operations at El Palito
themselves of such arrangements, as they are all because he views it as the launch of a new refin-
under sanction by the US and, to one degree or ery but because he views it as a stepping-stone
another, other petroleum-importing Western towards deals with other countries.
countries.) Certainly, there are some officials in Tehran
However, Owji’s statements about El Palito who seem to place a premium on this goal. For
should not be viewed as confirmation of this example, Mohammadreza Mir-Tajeddini, a
suggestion. Instead, they may amount to an member of the Iranian Parliament’s planning
exaggerated show of relief in response to prob- and budget committee, noted in mid-September Tehran may
lems that arose in August, hampering the imple- that his country had plans to construct oil refin- simply be
mentation of agreements signed earlier this year eries in Venezuela and Uruguay. The refinery
between Tehran and Caracas. projects will help Iran circumvent the US sanc- relieved to see
tions regime, he told the semi-official Tasnim
Past problems news agency. that the deals
According to a previous report from Argus
Media, those problems occurred in August, Show of relief it signed with
when PdVSA discovered that it could not refine Nevertheless, it is too early to treat the oil min- Caracas earlier
crude received from Iran as expected because it ister’s expansive statements about the launch of
was too acidic to be handled by the ageing equip- Iranian oil processing operations at El Palito as this year can be
ment at El Palito. a sign of something larger. They certainly do not
The NOC had tried to introduce the feed- appear to signal something as significant as the implemented
stock into the plant but discovered that it was opening of a new refinery, and they do not even
causing operational difficulties in the distilla- necessarily indicate that Venezuela and Iran are properly now
tion tower that continued for days afterward. As embarking upon anything new.
such, it redirected the Iranian crude feedstock Instead, they may show that Tehran is simply
to the Centro de Refinacion Paraguana (CRP), a relieved to see that the package of deals it signed
430,000 bpd complex in the western part of the with Caracas earlier this year can be imple-
country. mented properly now.
Iran was at the time supplying Venezuela That package provides for National Iranian
with crude oil that had a specific gravity of Oil Co. (NIOC) to provide PdVSA with a vari-
around 28 degrees API. This was classified as ety of needed goods and services – including gas
a medium grade of crude. It was lighter than condensate and crude that can be used as blend-
Merey, one of Venezuela’s main export grades, stock for Venezuela’s extra-heavy oil, as well as
which has a specific gravity of about 16.2 degrees refined petroleum products, refinery parts and
API, and was designed to serve as a diluent for assistance in repair and maintenance work –
locally produced extra-heavy crude so that El in exchange for oil supplies. It also includes an
Palito could increase the production of refined accord signed in early May under which the

Venezuelan Oil Minister Tareck El Aissami (C, unmasked), shown standing in front of El Palito refinery in June 2022 (Photo: PdVSA)

Week 42 20•October•2022 www. NEWSBASE .com P5