Chevron to send 500,000-barrel cargo of Venezuelan oil to its Pascagoula refinery

U.S. oil producer Chevron Corp plans to export this month its first cargo of Venezuelan crude to its Pascagoula, Mississippi refinery following a U.S. license granted last year, according to shipping documents seen by Reuters.

The 500,000-barrel cargo of Hamaca heavy crude, to be loaded at state-run PDVSA's Jose port, comes from the Petropiar oil joint venture operated by both companies.

As of Tuesday, the tanker scheduled to carry the shipment, the Bahamas-flagged Caribbean Voyager, was waiting to load near Jose, Refinitiv Eikon data showed.

Another Chevron-chartered vessel, the UACC Eagle, arrived on Tuesday in Venezuelan waters, the Eikon data also showed, carrying some 500,000 barrels of heavy naphtha that will be used to operate Petropiar's crude upgrader.

Chevron declined to comment on Tuesday and PDVSA did not immediately reply to a request for comment. The U.S. Treasury Department in November gave Chevron a 6-month license to reanimate and expand operations in Venezuela as a way to encourage talks between the government of Nicolas Maduro and the country's political opposition towards a presidential election this year.

Washington had previously authorized Italy's Eni and Spain's Repsol to recoup pending debts in Venezuela by taking Venezuelan crude for refining in Europe. The authorized shipments are set to slightly boost Venezuela's crude exports, which last year remained almost unchanged compared with 2021.

We remind, Technip Energies has been awarded a contract for the supply of proprietary cracking furnaces for the 2,000,000 tpy ethane cracker for the Golden Triangle Polymers project, a joint venture between Chevron Phillips Chemical (CPChem) and QatarEnergy, along the Gulf Coast in Orange, Texas. This latest award is in line with our early engagement strategy with CPChem and QatarEnergy, which resulted in the selection of our proprietary ethylene technology and includes the successful completion of the ethylene license and Process Design Package (PDP).

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Output from Vietnam's largest oil refinery is expected to fall by 20%-25% during the first 10 days of January as its residual fluid catalytic cracking (RFCC) unit has been shut down due to a technical problem, said Reuters.

The 200,000-bpd Nghi Son Refinery and Petrochemical has a leak at the RFCC unit, the government said in a statement.

Reuters first reported on the shutdown late last month.

The Ministry of Industry and Trade has asked fuel traders to increase their imports to compensate for the shortfall "to ensure sufficient fuels for the local market until the end of the first quarter," the government said.

Nghi Son refinery is 35.1% owned by Japan's Idemitsu Kosan Co, 35.1% by Kuwait Petroleum, 25.1% by Vietnam's state oil firm PetroVietnam and 4.7% by Mitsui Chemicals Inc.

We remind, Hyundai Engineering announced that it has completed the construction of Long Son Utility Plant in Vietnam. The company held an initial acceptance ceremony for the plant with the attendance of officials, including Hong Hyun-seong, CEO of Hyundai Engineering, and Thamasak Sethadom, executive vice president of Siam Cement Group, the client of the project.

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Vietnam's largest refinery, Nghi Son Refinery and Petrochemical (NSRP), has shut a residual fluid catalytic cracking (RFCC) unit for "troubleshooting", two sources familiar with the matter said Reuters.

"The issue was detected earlier this week and the refinery has been fixing it," one of the sources said, adding that "the unit is expected to resume normal operations soon." Details of the problem were not immediately clear.

Calls to the refinery seeking comment were not immediately answered. The 200,000 barrels-per-day refinery is 35.1% owned by Japan's Idemitsu Kosan Co, 35.1% by Kuwait Petroleum, 25.1% by Vietnam's state oil firm PetroVietnam and 4.7% by Mitsui Chemicals Inc.

We remind, Hyundai Engineering announced that it has completed the construction of Long Son Utility Plant in Vietnam. The company held an initial acceptance ceremony for the plant with the attendance of officials, including Hong Hyun-seong, CEO of Hyundai Engineering, and Thamasak Sethadom, executive vice president of Siam Cement Group, the client of the project.

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The nomination of a Brazilian senator and longtime energy consultant to lead Petrobras suggests President-elect Luiz Inacio Lula da Silva wants the state-run firm to pivot to more renewable energy projects, said Reuters.

Since 2019, Petroleo Brasileiro SA has doubled down on deep, and ultra deep-water exploration and production, while also selling off less productive assets to lower its debt load. But Jean Paul Prates, nominated on Friday to be chief executive, has been advocating for higher investments in renewables.

"Petrobras is a company for the long run and cannot just keep exploring sub-salt oil and paying dividends," Prates said in a press conference this month. Prates, a senator for the past four years, will become the first politician to hold a high-ranking office at Petrobras in several years. Still, his nomination may calm investors' fears that Lula would tap a meddlesome manager to run the oil company.

Last month, Prates, a prominent voice on energy policy within Lula's Workers Party, said the new administration would not have an interventionist stance on Petrobras, had no intention of causing a "breakdown" of the company and would discuss everything with market players.

"He was the best choice considering the upcoming scenario," said a current executive, speaking on condition of anonymity while working under outgoing President Jair Bolsonaro. Petrobras shares plunged as much as 25% after Lula defeated Bolsonaro in an October vote, but have pared losses since hitting a five-month low in mid-December.

A second Petrobras source said Prates, who holds a masters degree in energy planning from the University of Pennsylvania and another one in oil economics from the French Institute of Petroleum, "knows about the sector," adding they hoped he would take a "moderate stance".

Petrobras, Prates and the transition team's press officer did not immediately respond to requests for comment. The reservoir of industry knowledge boasted by Prates, who founded an energy consulting firm three decades ago, won unlikely praise from Bolsonaro's former mines and energy minister Bento Albuquerque.

We remind, Petrobras has started output at the Itapu pre-salt field in the Santos basin via the P-71 floating production, storage and offloading vessel. The P-71 FPSO, which features a processing capacity of 150,000 barrels per day of oil and 6 million cubic metres per day of natural gas, was deployed in water depths of 2010 metres. “We were able to anticipate production of the P-71 platform, which was originally scheduled for 2023,” said Petrobras production development director Joao Henrique Rittershaussen.

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China has raised its first batch of 2023 export quotas for refined oil products by nearly half versus a year ago, said Reuters.

The quotas could encourage refiners at the world's top crude importer to process more crude and keep fuel exports at record levels in the first half, mitigating the impact of possible cuts in Russian diesel exports when European Union sanctions take effect in February.

The government has released 18.99 MMt of quotas to cover mostly gasoline, diesel and jet fuel exports, up 46% versus 13 MMt allotted a year earlier, reported by consultancies JLC and Longzhong, both of which have closely tracked Beijing's fuel quota policy in recent years.

Of the total, state-run China Petrochemical Corp (Sinopec), China National Petroleum Corp, China National Offshore Oil Company, Sinochem Group, as well as privately-controlled Zhejiang Petrochemical Corp, were granted a total of 18.73 MMt of permits, the agencies said. A refinery subsidiary of state defense conglomerate Norinco and China National Aviation Fuel Company was allotted the remainder.

The Ministry of Commerce did not respond to a request for comment. The increased quotas followed a sizable issuance of 13.25 MMt in September as the government sought to shore up its economy by encouraging refiners to step up operations and to benefit from robust export profits.

They could prompt state refiners to maintain relatively high operation rates and allow the newly started refineries to ramp up production, Mia Geng, an analyst with FGE, said. China's spare refining capacity could indirectly mitigate the deficit from the European Union's ban of Russian diesel imports from February, Citi analysts said in a note.

"We believe there were ample quotas available to keep Chinese exports at record-high level into first half of 2023, although a gradual decline seems likely from second half on a pickup in mobility and jet fuel demand on China reopening," they said. The bigger quotas also reflected weak domestic fuel consumption as a surge in COVID-19 infections, following the relaxation of virus control measures, crimped travel and economic activity, a trader said.

We remind, INEOS and SINOPEC have completed two of the four significant petrochemical deals announced earlier this year. The two deals are: SECCO joint venture. INEOS has acquired 50% of Shanghai SECCO Petrochemical Company Limited. ABS joint venture. INEOS and SINOPEC have also established a 50:50 joint venture for ABS (Acrylonitrile Butadiene Styrene), based on INEOS’ world leading proprietary ABS Technology.
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