UPDATE 1-Venezuela's PDVSA puts exports of diluted crude for Oct on hold -traders
(Updates with exports figures, information about inventories)
By Marianna Parraga
HOUSTON Aug 29 (Reuters) - Venezuela's state-run oil company PDVSA has put on hold plans to export diluted crude oil (DCO) in October while it reviews rising production costs as a result of imports of pricey naphtha that it uses to mix with extra heavy crude, traders told Reuters on Friday.
The move comes as the company scrambles to cut costs to partially solve its cash flow problems. Reuters reported on Wednesday that PDVSA is considering importing Algerian Saharan Blend light crude instead of costly naphtha that it has been buying since 2013 to use for its blends..
One of several sources who was told of the halt by the company said it might also try to raise DCO prices to better offset import costs.
"Sales of DCO are suspended, but PDVSA said it won't stop production of these crudes. It will use its facilities in the Caribbean to store them and it is even considering to use tankers for storage," one source said.
PDVSA has two storage facilities in Curacao and rents tanks in Aruba and the island of Saint Eustatius from U.S. oil firms Valero Energy and NuStar Energy. From there, it loads very large crude carriers (VLCC) to Asia.
Most of the diluted crude oil produced by PDVSA is absorbed by its U.S. refining arm, Citgo Petroleum, but other firms such as Valero and Chevron also receive cargoes regularly.
The state-run company sent 4.99 million barrels of diluted crude oil in August to the United States - some 166,000 barrels per day - in ten cargoes, according to Reuters Trade Flows data. Continuación...