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Petroleum

Chevron and Venezuela's PDVSA Near Agreement on Boscan Heavy-Crude Field

Strategic Insights

— 1 min read

A potential deal between Chevron Corp. and Petroleos de Venezuela S.A. (PDVSA) may be finalized next week, with the US oil major set to take responsibility for maintaining production of the Boscan heavy-crude field in Venezuela. The three-part agreement includes a crude supply arrangement, an asphalt marketing plan, and a term-sales agreement for PDVSA to supply heavy crude to Chevron's Pascagoula, Miss., refinery. Chevron would deliver Boscan crude to PDVSA's Maraven subsidiary for marketing, while also taking 40,000 b/d of the crude for its US asphalt refineries.

Key Takeaways:

  • Chevron is close to finalizing a financial agreement with PDVSA for the Boscan heavy-crude field in Venezuela, with officials scheduling a meeting for next week.
  • The operating contract would put Chevron in charge of maintaining production of the 10-degree API crude field, which has been producing around 80,000 b/d.
  • The agreement would include a crude supply arrangement, an asphalt marketing plan, and a term-sales arrangement for PDVSA to supply heavy crude to Chevron's Pascagoula refinery.
  • Boscan crude would be delivered to PDVSA's Maraven subsidiary for marketing, while also being used to supply Chevron's US asphalt refineries, including the two in the Northwest and the Perth Amboy asphalt plant in New Jersey.
  • PDVSA would like to set up a 50-50 joint venture with Chevron for marketing asphalt from the Northwest plants, which would not compete with PDVSA's existing US asphalt operations through its Citgo Petroleum Corp. subsidiary.

Statistics:

  • 80,000 b/d: The current production rate of the Boscan heavy-crude field.
  • 10-degree API: The classification of the Boscan heavy crude.
  • 40,000 b/d: The amount of Boscan crude Chevron would take for its US asphalt refineries.
  • 2: The number of asphalt refineries in the US Northwest that Chevron would supply with Boscan crude.
  • 1: The number of asphalt refineries in New Jersey that would receive Boscan crude.

Sources:

  • A source, quoted last week.
  • Chevron Corp.
  • Petroleos de Venezuela S.A. (PDVSA)
  • Maraven subsidiary
  • Petroleos Mexicanos (PEMEX)
  • Shell Oil Co.
  • Citgo Petroleum Corp. (a subsidiary of PDVSA)

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