Vitol, Trafigura accelerate Venezuelan oil sales under US-backed $2 bln supply deal

By Marianna Parraga and Shariq Khan

HOUSTON, Jan 22 (Reuters) - Trading house Trafigura sold a cargo of Venezuelan oil to a Spanish refiner, while rival Vitol prepared to export Venezuelan fuel oil as shipments accelerate from the OPEC nation under a U.S.-backed $2 billion oil supply deal following the capture of President Nicolas Maduro, oil industry sources said on Thursday.

Vitol and Trafigura earlier this month obtained the first U.S. licenses to load and export Venezuelan oil, with initial sales reaching $500 million last week or about 11 million barrels, U.S. officials said. Other companies, including U.S. major Chevron CVX.N, are waiting for Washington to give them exemptions to U.S.-imposed sanctions on the country before they further expand exports.

The trading companies have since taken crude cargoes and stored the oil at terminals in the Caribbean, and offered the Venezuelan crude to refiners in the U.S., Europe and India, according to shipping data and industry sources.

Trafigura this week completed its first crude sale to a final customer in a deal with Spanish company Repsol REP.MC, while Vitol has negotiated cargoes to U.S. refiners including Valero VLO.N and Phillips 66 PSX.N and to its own Saras refinery in Italy, sources said.

Vitol and Trafigura declined to comment.

The sales signal that the landmark 50-million-barrel supply deal between Caracas and Washington is accelerating, and that millions of barrels of Venezuelan oil are beginning to flow to refiners worldwide after several years when they could not buy it due to U.S. sanctions.

Venezuela has received higher prices for the oil bought by Vitol and Trafigura than it did under sanctions, when the country had to offer steep discounts to encourage buyers to take the risk of flouting U.S. restrictions on facilitating Venezuelan oil exports, U.S. officials have said.

Vitol and Trafigura paid a discount of $15 to the international Brent crude benchmark, up from a discount of around $30 a barrel previously. With Brent trading at $63 a barrel on Thursday, Venezuela would be receiving about $48 per barrel versus around $33 per barrel under sanctions.

For the 50 million barrels that Venezuela has agreed to sell under the U.S.-backed deal, the higher sales price would generate additional revenue of $750 million.

FUEL OIL TO DEPART

Executives from Vitol this week instructed business partners in Venezuela to assess terminals operated by state-run energy company PDVSA, including Amuay and El Palito, to begin loading fuel oil cargoes there in the coming days, two of the sources said.

Fuel oil, which can be used for power generation, is one of the products that refineries produce when they process crude. The OPEC country produces high-sulphur residual fuel oil, which it used to sell to customers in Asia.

Vitol also has a cargo of fuel that is due to arrive in Venezuela shortly, shipping data showed. That cargo contains naphtha, which Venezuela needs for blending with its extra heavy crude. This dilutes the crude, making it less viscous and easier to transport.

PDVSA did not reply to a request for comment.

Venezuela previously imported naphtha from Russia, but those shipments halted when U.S. President Donald Trump imposed a blockade on oil shipments into and out of Venezuelan waters in December.

Venezuela has millions of barrels of crude and fuel oil stored onshore and in vessels as a consequence of a U.S. oil blockade that began in December as a way to pressure Maduro's administration.

The mounting stocks forced PDVSA to cut back output, with production declining to some 880,000 barrels per day in early January, from 1.16 million bpd in late November, independent figures showed.

PDVSA also sent millions of barrels of residual fuel, including fuel oil, to waste pools in the country's western region to avoid shutting down its domestic refineries, sources said this month.

Rising exports were expected to help PDVSA reverse the oil output cuts in the coming days, three company sources said.