PDVSA Incorporates New Tankers into Fleet

(Energy Analytics Institute, Ian Silverman, 25.Oct.2013) – PDVSA President Rafael Ramirez speaks to reporters in Puerto la Cruz, Venezuela about introduction of news tankers into fleet.

Highlights of the discussion follow:

PDVSA incorporates VLCC Ayacucho and Suezmax Rio Arauca tankers, both built in China, into its fleet.

The new PDVSA VLCC Ayacucho tanker (332 meters long x 60 meters wide) has oil capacity to transport 2 MMbbls.

The PDVSA VLCC Ayacucho tanker will cover the route Venezuela-Singapore-China-Venezuela.

PDVSA plans to incorporate 3 more VLCC tankers into its fleet by YE:13.

The new PDVSA Suezmax Arauca tanker has oil capacity to transport 1 MMbbls.

PDVSA plans to incorporate 3 more Suezmax tankers into its fleet over the next 40 days.

PDVSA tanker fleet numbers 81, of which 54 are controlled by Venezuelan gov’t, allowing co. to control 66.67% of the Venezuelan oil fleet.

We have obtained financing from international banks, as well as banks from Japan and China. These are long term financing deals that are paid by the fleet. We expect to pay back these financing agreements within 5 or 6 years.

PDVSA President Rafael Ramirez on arrival of new tankers:

The Ayacucho arrived on 5.Oct.2013 and the others will arrive accordingly: Boyaca, Nov.2013; Carabobo, May.2014; and Junin, Oct.2014.

We will be looking to acquire four additional VLCCs.

We have tankers that are being constructed in Portugal, Brazil, China, Iran, Korea, in a way to diversify the supply of tankers.

The Suezmax Rio Arauca has capacity to transport 1.2 MMbbls, we are waiting on a total of 4 tankers

We are taking steps to guarantee our sovereignty in respect the transport of our crudes.

In 2012, we had a 33 tanker fleet and PDVSA just owned 12, or 36% was under PDVSA control. The remaining fleet of 21 was controlled by third parties who controlled 64%

We now have 81 tankers in our fleet, 52 controlled by PDVSA and 30 owned by PDVSA. Allowing PDVSA to have 66.6% of tanker fleet under its control.

The VLCCs conditioned to transport 2 MMbbls of Merey heavy oil to China. A typical VLCC has a dead weight of 300,000 tons, has a 2 MMbbl capacity, and can be loaded in 20 hours.

It is uneconomic for Venezuela to send oil to China using tankers with capacity of just 0.500 to 0.600 MMbbls, which translate into a $12/bbl for transport costs. In contrast, using tankers of 2 MMbbls we are able to reduce our transport costs to less than $3/bbl.

Our business plan for 2015 calls for PDVSA to have 52 tankers that are owned by PDVSA.

Our goal with China is to maintain average exports at 640 Mb/d in 2013. We have committed 200 Mb/d with financing schemes depending again on oil price.

We do not have problems in terms of tanker transportation, but our tanker plan encompasses renovation of tankers since we have tankers with more than 20 years of operation that need to be renovated.

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