Iran has started refining its crude oil in Venezuela, Iranian media have reported, citing oil minister Javad Owji.
Iranian crude is being processed at a rate of 100,000 bpd at the El Palito refinery, the minister said, as quoted by state news agency Shana.
Another Iranian news agency, Mehr, cited the minister as saying the El Palito refinery was the first one “built by Iran” overseas and adding that Tehran will pursue more overseas refinery projects in other countries besides Venezuela.
Plans for the tie-up have been in the making for quite a while. As Owji put it, "This was a long-standing and 43-year-old dream that was realized through the efforts of my colleagues at the National Iranian Oil Refining and Distribution Company (NIORDC)."
The actual agreement to start refining Iranian oil at the El Palito refinery was closed this spring as the two inked a deal to boost output at Venezuela’s largest refinery.
According to a Reuters report from July, the agreement stipulated that PDVSA would receive 4 million barrels of Iranian heavy crude in that month alone to be refined at the El Palito facility.
The additional volumes would help Venezuela boost the output of its flagship export grade, Merey, which Asian refiners prefer, Reuters noted in its report. Iran has also been helping Venezuela boost its oil exports by supplying it with gasoline and condensates to blend into the heavy crude, as well as equipment and assistance.
The cooperation between Caracas and Tehran helped Venezuela boost its oil exports to over 700,000 bpd of crude and refined products last month, Reuters reported earlier this month, citing tanker tracking data and internal PDVSA documents.
China remained the biggest buyer of Venezuelan oil and fuels, just as it remains the biggest buyer of Iranian oil and, most recently, Russian oil.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.