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(Reuters, 29.Jul.2019) — Venezuelan state-run oil company PDVSA said on Monday the Petropiar extra-heavy crude upgrader, part-owned by U.S. oil company Chevron Corp, had begun operations as a blending facility.

The facility, which used to produce upgraded crude destined mainly for the U.S. market, is expected to produce some 130,000 barrels-per-day (bpd) of heavier Merey crude with an API gravity of 16, PDVSA said in a statement, adding that the first Merey shipment from the plant of 520,000 barrels had been loaded.

Reuters last month reported that PDVSA planned to convert Petropiar into a facility that blended heavy and light oils to make Merey, a grade favored by Asian refiners, citing internal company documents detailing the strategy.

Petropiar once made up to 210,000 bpd of exportable “synthetic” crude out of tar-like oil from the OPEC nation’s Orinoco Belt, home to one of the largest crude reserves in the world.

But PDVSA struggled to find buyers for that grade after the United States, previously the largest customer for Venezuelan crude, sanctioned PDVSA in January to pressure socialist President Nicolas Maduro to step down.

The Treasury Department last week renewed Chevron’s license to continue operating Petropiar and its three other joint ventures with PDVSA despite the sanctions for three months. It had previously been set to expire on July 27.

In the statement, PDVSA said the conversion of Petropiar to a blending facility was “part of the socialist efforts underway at the upgraders of the Jose Antonio Anzoategui industrial complex” where its four extra-heavy crude upgraders are located.

It did not say whether it planned to convert the other upgraders, which include the Petrocedeno facility part owned by France’s Total and Norway’s Equinor and the Petromonagas plant part-owned by Russia’s Rosneft into blending facilities as well.

The Petrosanfelix upgrader, wholly owned by PDVSA, has been offline for months.

Reporting by Luc Cohen; Editing by Leslie Adler and Susan Thomas

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