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Lack of dredging in Venezuela poses problems for Chevron's heavy oil exports

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HOUSTON/MARACAY, Venezuela, Jan 4 (Reuters) – A shipping channel snafu is slowing efforts by Chevron Corp (CVX.N) to load tankers at one of its four Venezuelan joint ventures and bring heavy crude to the United States. States, three people familiar with the matter said on Wednesday.

In November, Washington authorized the last major American company still operating in Venezuela to restore lost production and start exporting oil as a way to encourage talks between the government of Nicolás Maduro and the country’s political opposition.

But a plan to move heavy oil quickly from stockpiles at the Petroboscan joint venture with state-owned PDVSA is facing delays due to a lack of dredging in the Lake Maracaibo shipping channel, the people said.

A dredge is often needed to clear the bed of water areas, removing mud, weeds and rubbish so that vessels can pass.

Shallow waters in the channel caused a ship unrelated to Chevron carrying scrap to run aground in December. Petroboscan has since instructed ships to limit draft after loading at the Bajo Grande oil terminal.

The canal on Lake Maracaibo, in the northwest of the country, is suitable for loading tankers with a draft of just 9.8 meters, one of the people said. This means that around 250,000 barrels of Boscan heavy oil can move through the channel connecting Bajo Grande to the Caribbean Sea at a time.

In a sign that Chevron expects to expand operations quickly, the oil producer has begun advertising to Venezuelan contract administrators and cargo schedulers. It is recruiting to rehire long-idled operations, primarily for its marketing and trading divisions, which will handle oil exports to its own US refineries and others.

Chevron began preparing to revive operations at its joint ventures in Venezuela last year when it filed a license application with the US Treasury Department following an agreement with PDVSA. The company wants to set up a trading team to sell oil from Venezuela and expand its activities in the four projects.

PDVSA and Chevron did not respond to requests for comment.

LITTLE BY LITTLE

Small tankers coming from Bajo Grande are transporting oil from western Venezuela to a ship-to-ship transfer area along the country’s coast, where they fill larger ships. The first cargo chartered by Chevron loaded this way has yet to depart for the United States, according to the people and tracking data from Refinitiv Eikon.

Chevron has chartered three ships to Venezuela: the UACC Eagle, which will unload a US cargo of heavy naphtha at PDVSA’s port of Jose later this week; the Caribbean Voyager, which is carrying 500,000 barrels of Hamaca oil to Chevron’s refinery in Pasacagoula, Mississippi; and the Kerala, which arrived Tuesday at the Lake Maracaibo channel to load Boscan oil, according to shipping documents and Eikon data.

Italian oil company Eni (ENI.MI) also plans to obtain a cargo of Venezuelan oil this month under an agreement that began last year to receive Venezuelan oil in exchange for paying outstanding debts, according to another person familiar with the matter.

Editing by Marianna Parraga in Houston and Mircely Guanipa in Maracay, Venezuela Additional reporting by Deisy Buitrago in Caracas Editing by Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

Marianna Parraga

Thomson Reuters

Focused on energy-related sanctions, corruption and money laundering, with 20 years of experience covering the oil and gas industries in Latin America. Born in Venezuela and living in Houston, she is the author of the book “Oro Rojo” about the troubled Venezuelan state PDVSA and the mother of three boys.

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