The export of technical-engineering services to the largest refinery of Venezuela/Iran oil after El Palito will reach Paraguay

According to the economic reporter of Fars news agency, “oil marketing” is one of the solutions to neutralize the oil embargo in the country’s oil export field, which has been the focus of the Ministry of Oil in the 13th government.

According to this policy, Iran exports its oil to foreign refineries by becoming a shareholder in offshore refineries or by activating neglected refining capacities in different parts of the world by exporting technical and engineering services.

Among the extra-territorial refineries that have become Iran’s oil export destinations with the policy of “oil marketing” in the 13th government, two refineries, “El Palito” and “Paraguana” in Venezuela, can be mentioned.

* Increase in the export of 100 thousand barrels of oil to Venezuela after the repair of the El Palito refinery

In the first contract, Iran’s and Venezuela’s Oil Ministers, Ali Oji and Tariq Al-Aisami, signed an initial contract in early May with the aim of supplying refinery equipment and helping with major repairs and completing the capacity of the 140,000-barrel state refinery “El Palito” in Carabobo state.

The “El Palito” refinery is the smallest oil refinery in Venezuela, which is currently operating at 50% of its capacity. The value of this contract was 110 million euros.

According to the agreement between the two countries, the financial resources of this project will be provided by Niko company. The crude oil feed of this refinery should be supplied with the participation of National Iranian Oil Company through Niko Company.

After the signing and implementation of this contract, Reuters reported in a report titled “Iran boosts crude supply to Venezuela for refining, freeing up exportable oil” that Iran exports 200 thousand barrels of oil and gas condensate to Venezuela daily, which is 100 thousand barrels compared to the previous months. It has increased before July 2022 (Figure 1).

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* 460 million euro contract for the reconstruction of the Paraguana refinery

A little later, Reuters news agency reported that Iran’s state-owned companies sent parts to restart a gasoline production unit to the “Paraguana” refinery. After the US embargo on Venezuela, the small investment in this refinery, the passage of time and the lack of basic repairs have caused the refinery to wear out and some of its parts have become inoperable.

The Paraguana refinery complex with a capacity of 955,000 barrels is located in Punto Feijo, Venezuela, which is known as the third largest refinery in the world. This refinery complex consists of three refineries named Ewai Refinery, Kadon Refinery and Grande Refinery.

At the beginning of this week, Reuters news agency in an exclusive news entitled “Iran to start revamp at Venezuela’s largest refining complex within weeks” (picture 2) announced the signing of the contract to restore the capacity of the Paraguana refinery between Iran and Venezuela and stated: State companies from Iran and In the coming weeks, Venezuela will begin a 100-day renovation of the South American country’s largest refinery complex to restore its crude distillation capacity.

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According to this news, in the coming weeks, a contract worth 460 million euros will be signed with Iran for the reconstruction of the Paraguana refinery complex with a capacity of 955,000 barrels per day on the west coast of Venezuela.

The reconstruction of Venezuela’s refineries is important for Iran because it has become a destination for the export of Iranian oil and the sale of the resulting products and has increased the amount of Iranian oil sold under sanctions. Also, this action means the export of Iran’s technical and engineering services to Latin American countries, which will also bring significant foreign exchange to the country.

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