Companies scramble to secure ships, assemble operations to transfer Venezuelan oil, sources say

(AP Moller-Maersk’s Reuters Identifier removed in paragraph 6. Maersk Tankers were divested from AP Moller-Maersk in the period 2017-2019)

Shipping companies want to expand operations for Venezuelan oil transfers

Challenges include old ships, maintenance issues and dock competition

Maersk plans to copy logistics used for oil transfers in Amuay Bay

Customers apply to EEC for transfer of Venezuelan crude oil to smaller ships

Written by: Marianna Parraga and Arathy Somasekhar

HOUSTON, Jan 9 (Reuters) – Oil companies aiming to participate in new exports of Venezuelan crude to the United States following the ouster of President Nicolas Maduro are in hasty talks to find tankers and organize operations to safely transfer crude from ships and devastated Venezuelan ports, four sources familiar with operations said.

Trading companies and oil companies including Chevron, Vitol and Trafigura are vying for U.S. government deals to export crude oil from Venezuela after President Donald Trump said Venezuela was ready to transfer up to 50 million barrels of sanctioned oil to the United States, sources said. Trafigura said in a meeting with the White House on Friday that its first ship will load next week.

Venezuela, which has been facing a US blockade in recent months, stores oil in tankers and has filled almost all of its land storage tanks. Ships carrying oil are old, neglected and under sanctions. Even if the U.S. issued a license, other ships would not be able to make direct contact with sanctioned vessels due to liability and insurance requirements, the sources said.

The fact that the tanks on land have not been maintained for years poses a risk for parties trying to load oil. Shipping companies Maersk Tankers and American Eagle Tankers are among firms looking to expand ship-to-ship transfer operations in Venezuela, three of the sources said. Maersk Tankers could replicate the ship-to-shore logistics it previously used in the Gulf of Amuay in Venezuela, a source said. Maersk already has operations on the nearby islands of Aruba and Curacao, whose waters are often used to transport Venezuelan oil. However, transfers in Aruba and US ports are possible but more expensive.

“Maersk’s presence in Venezuela is limited, with 17 employees in the country. All employees are safe and responsible and there are currently no changes to our ocean services. Operations are continuing with only minor delays at this stage and we continue to monitor the situation closely,” the company said in a statement. he said.

Another shipping source said transshipment operations will be complicated by a shortage of smaller ships to move oil from storage ships to piers where it can be transferred to another ship, and inadequate maintenance of machinery and equipment.

EEC, which already helps transfer Chevron’s Venezuelan crude oil shipments to the United States, has been approached by potential customers to expand its capacity in that region, two of the sources said.

EEC and Chevron did not immediately respond to requests for comment.

Sources said that supply could reach the 500,000 barrels per day that Venezuela exported to the United States before sanctions and that accumulated stocks could be depleted within 90-120 days, but that goal would be difficult to achieve if oil had to be taken from both tankers and onshore warehouses.

Companies are also competing fiercely for loading slots at Venezuela’s main Jose oil terminal, where there are capacity and speed limits. Chevron, a major joint venture partner in the country, is also competing aggressively to maintain its privileged position in Venezuelan terminals while preparing its fleet of ships, a source said.

An industry source in Venezuela said oil companies including Chevron, Vitol and Trafigura were already supplying much-needed naphtha. Naphtha is typically blended into heavy Venezuelan crude oil to reduce its density and make it easier to transport and process in refineries.

(Reporting by Marianna Parrage and Arathy Somasekhar in Houston; Editing by Liz Hampton and Rosalba O’Brien)