Page 5 - LatAmOil Week 42 2022
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LatAmOil                                     COMMENTARY                                            LatAmOil


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




























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



       Week 42   19•October•2022                www. NEWSBASE .com                                              P5
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