Indian refineries, especially those with high complexity, will benefit significantly if the US carries out its threat to impose sanctions on Venezuela’s oil sector, potentially forcing diversion of 740, 000 barrels per day of heavy oil exports to Asia.
RIL’s Jamnagar and Essar’s Vadinar refineries in Gujarat and IOC’s recently commissioned Paradip refinery in coastal Odisha can take this type of crude.
These Indian refiners would find Venezuelan oil attractive as Opec output cuts have hit supplies of heavy crude. India has room to increase imports, analysts and traders said.
Russia is one of Venezuela’s main creditors and will have first priority to its oil if sanctions are imposed and it is expected to make the surplus cargoes available in the spot market.
Rosneft may ship Venezuelan crude to its newly acquired Essar Oil refinery in India, said one trader based in Asia who deals with Venezuelan crude, adding any surplus could be re-sold by Russian companies to other Asian buyers.
Cash-hungry Venezuela has offered ONGC Videsh an increased stake in an oil field, according to two sources close to the proposal, as the country seeks to shore up its bruised energy industry and strengthen ties with New Delhi.
State oil firm Petroleos de Venezuela SA (PDVSA) has proposed selling a 9 percent stake in the San Cristobal field to ONGC Videsh (OVL).
ONGC Videsh already holds a 40 percent stake in the field, which produces around 22,000-23,000 barrels per day (bpd) of oil. While the amount of the sale would be relatively modest, according to analysts, any extra income would be welcome for PDVSA.
Washington is considering sanctions on Venezuela’s oil industry in response to the ruling Socialist Party’s crackdown on officials and parties opposed to the government. An embargo against Venezuelan crude could block imports of about 740,000 barrels per day to the US.
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