Tehran and Caracas to Expand Oil Cooperation

Iran and Venezuela have signed new memorandums of understanding to expand bilateral cooperation in oil and gas industry.

Iranian Oil Minister Javad Owji and his Venezuelan counterpart Pedro Rafael Tellechea signed a number of MoUs and documents in Caracas on Sunday in the presence of the Latin American country’s Vice President Delcy Rodriguez to boost cooperation in downstream and upstream oil sectors.

The MoUs include the development of oil and gas fields, the overhaul of refineries to maximize their capacity, the renovation and reconstruction of petrochemical complexes with Iranian technical services and equipment to raise output and modernization of loading dock and oil terminal, as well as increasing trade and export of oil, gas condensate and petroleum products.

Modernize the largest refining complex in the venezuela

Tehran has strengthened ties with Caracas in recent years, providing crude and raw materials for Venezuela’s aging refining network, as well as overseeing a project to modernize the largest refining complex in the country.

Iran and Venezuela, the two nations hit by US sanctions, signed a document of comprehensive 20-year strategic cooperation during President Nicolas Maduro’s visit to Tehran last June.

Since 2020, the two countries have expanded cooperation, particularly for energy projects and oil swaps, helping the Caribbean nation ease the effect of Washington’s measures.

Aframax Tankers

Iran has so far delivered two domestically manufactured Aframax oil tankers to Venezuela.

Aframax has a deadweight of about 100,000 tons and can carry 113,000 tons of crude oil equivalent to 750,000 barrels.

Each 250-meter-long vessel is equipped with a 21,000-horsepower engine and three diesel generators that are capable of producing 900 kilowatts of electricity.

The delivery has been part of arrangements between the two countries to counter American sanctions targeting their oil sectors.

According to a contract signed by the two sides, Iran is to build and deliver two more oil tankers to Venezuela.

Due to their favorable size, Aframax tankers can serve most ports in the world. These vessels serve regions that do not have very large ports or offshore oil terminals to accommodate very large crude carriers and ultra-large crude carriers.

The construction of Aframax oil tankers based on international standards is indicative of Iran’s technological prowess in the field.

The tankers were manufactured by the Iranian Marine Industrial Company (Sadra), whose shipbuilding yards are situated along the Persian Gulf coast in Bushehr Province. Founded in 1968, it has established itself as a leading shipbuilding and ship repairing company in Iran. It is also active in offshore oil and gas development.

The company, which is a sister company of Iran Shipbuilding and Offshore Industries Complex Company, specializes in building ships, docks and floating oil rigs.

Gas Sector

Last October, Reza Noshadi, managing director of the state-run Iran Gas Engineering and Development Company, and Juan Santana, deputy CEO of Venezuelan state oil company PDVSA discussed cooperation in Tehran.

Talks were mainly focused on supplying Venezuelan gas industry with high-quality Iranian equipment.

In the meeting, Santana said PDVSA was interested in drawing on Iran’s experiences in LNG production projects, gas liquefaction, construction of gas pressure boosting facilities, gas processing plants and pipe-laying schemes.

Iran has also sent five tankers to Venezuela in recent years, delivering 1.53 million barrels of Iranian gasoline to the Latin American country.

After the collapse of Venezuela’s oil refining industry and 2019 sanctions imposed by the United States preventing fuel suppliers from sending gasoline to Venezuela, the country experienced a chronic shortage of gasoline.

Published: Apr 16, 2023

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