January 22, 2019 / 9:23 PM / a month ago

UPDATE 2-Venezuela's PDVSA sells oil by tender, seeks prompt gasoline -traders

(Adds status of main refineries)

By Marianna Parraga

Jan 22 (Reuters) - Venezuela’s state-run PDVSA is offering to sell up to 4.45 million barrels of crude on the open market and to buy 1.2 million barrels of gasoline for prompt delivery as its refineries struggle to operate, traders said on Tuesday.

The OPEC-member’s 1.3-million-barrel-per-day refining network operated at reduced rates last year amid lack of spare parts, underinvestment and insufficient flow of light crude to mix with Venezuela’s heavy and extra heavy grades.

“The refineries are barely working. Some of them currently are trying to resume operations to reach normal levels,” a PDVSA source said.

Traders said PDVSA is offering a 500,000-barrel cargo of Santa Barbara crude, a 550,000-barrel cargo of Leona crude and a 600,000-barrel cargo of Morichal crude for late January delivery; two 400,000-barrel cargoes of heavy Boscan crude for early February; and two 1-million-barrel cargoes of Merey and Diluted Crude Oil (DCO) for February delivery.

The company did not respond to a request for comment.

PDVSA ships almost all of its crude production through long-term supply agreements with refining firms. Tenders to sell crude on the open market are rare and typically respond to cash needs or refining woes that stop it from processing the oil domestically.

PDVSA, which has not yet awarded the offers, is also seeking four 300,000-barrel cargoes of gasoline for delivery from late January through mid-February at any of its ports, the sources said.

A separate agreement to buy an extra 750,000-barrel cargo of gasoline is also being negotiated with refiners, one of the sources said, as Venezuela is producing a very low volume of finished motor fuels.

Key operational units at PDVSA’s largest refining complex, the Paraguana Refining Center (CRP) capable of producing 955,000 barrels per day (bpd) of fuel, have been working intermittently in recent months, according to workers.

Venezuela’s 187,000-bpd Puerto la Cruz refinery accumulates months of inactivity and the 146,000-bpd El Palito continues facing problems due to unstable power supply, they added.

“All of the refineries’ cracking units are out of service except for the one in Cardon, which is not working properly,” said Ivan Freites, a union leader at PDVSA’s CRP, integrated by the Amuay and Cardon refineries. (Reporting by Marianna Parraga in Mexico City, with additional reporting by Mircely Guanipa in Punto Fijo and Deisy Buitrago in Caracas; editing by Grant McCool and Diane Craft)

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