Tokyo: Japanese refiners have purchased Venezuelan crude for the first time in about two decades under a long-term deal that offers both countries greater diversity.
Nippon Oil Corp bought 500,000 barrels of light sweet Santa Barbara crude, a rarity among Venezuela's largely heavy grades, while Idemitsu Kosan Co bought 400,000 barrels, the companies said in statements released yesterday.
They said they bought the crude oil from trading houses Mitsui & Co and Marubeni Corp, which have agreed to buy two million barrels of Santa Barbara crude from the Venezuelan state oil company PDVSA.
The crude, to be loaded in Venezuela in mid-August for delivery in early October, was also sold to Mitsui affiliate Kyokuto Petroleum Industries and an unnamed fourth buyer.
The transaction is part of a $3.5 billion financing that PDVSA accepted in February from the two trading houses and the Japan Bank for International Cooperation (JBIC).
Under the contract, the financing can be repaid with crude oil and oil products supplies, and offers the two firms an unusually long 15-year source of supply.
Venezuela wants to diversify its customer base away from the United States, while resources-poor Japan is looking for ways to lessen its dependence on the Middle East for its energy supplies, due to fears political tensions will threaten shipments.
A Mitsui spokesman said the two trading companies are likely to buy several crude cargoes a year based on this agreement.
Santa Barbara crude's API is 39.3 with sulphur content of 0.31 per cent, Idemitsu said.
Japan has not imported Venezuelan crude oil since it bought a small volume on a spot basis in the 1980s.