Iran has started refining its crude oil in Venezuela, Iranian media reported, citing Oil Minister Javad Owji.
Iranian crude is being processed at a rate of 100,000 bpd at the El Palito refinery, the minister said, quoted by the official Shana news agency.
Another Iranian news agency, Mehr, quoted the minister as saying that the El Palito refinery was the first “Iran-built” overseas and adding that Tehran will pursue more refinery projects overseas in countries other than Venezuela.
The reconciliation plans have been in the works for some time. As Owji said, “It was a 43-year-old dream that was realized through the efforts of my colleagues at the National Iranian Oil Refining and Distribution Company (NIORDC).”
The actual deal to begin refining Iranian oil at the El Palito refinery was reached this spring as the two signed an agreement to increase production at Venezuela’s largest refinery.
According to a Reuters report from July, the deal stipulated that PDVSA would receive 4 million barrels of Iranian heavy crude in that month alone to be refined at the El Palito facility.
The additional volumes would help Venezuela increase production of its flagship export grade, Merey, which Asian refiners prefer, Reuters noted in its report. Iran has also helped Venezuela increase its oil exports by providing gasoline and condensates to mix with heavy crude, as well as equipment and assistance.
Cooperation between Caracas and Tehran helped Venezuela boost its oil exports to more than 700,000 bpd of crude and refined products last month, Reuters reported earlier this month, citing tanker tracking data and PDVSA internal documents.
China has remained the biggest buyer of Venezuelan oil and fuels, just as it remains the biggest buyer of Iranian oil and, more recently, Russian oil.
By Irina Slav for Oilprice.com
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