January 10, 2018 / 5:04 PM / 2 months ago

Algeria sends more oil to Cuba as Venezuelan supplies fall

ALGIERS, Jan 10 (Reuters) - Algeria sent 2.1 million barrels of crude oil to Cuba last year and will ship the same amount in 2018, an official at state energy firm Sonatrach said on Wednesday, helping Cuba to offset lower supplies from the island’s closest ally, Venezuela.

“We delivered in 2017 three times 700,000 barrels, a total of 2.1 million barrels to Cuba,” Omar Maaliou, Sonatrach’s vice president in charge of trade and marketing, told Reuters. “We will do the same this year, the first 700,000 barrels are about to be delivered.”

Saharan Blend light sweet crude is Algeria’s main export grade. Cuba and Algeria have maintained a close relationship in recent years. The island annually imports some $200 million to$300 million of oil products from the African country, including some purchases of naphtha.

Cuba is also a regular buyer of Algerian jet fuel.

But Cuba has relied almost exclusively on Venezuela, also an OPEC member, for its crude supplies through a 15-year-old assistance programme that Caracas has been struggling to maintain as power cuts, lack of investment and payment delays slash its oil output.

Insufficient crude imports last year – mainly from Venezuela - forced Cuba’s state-run oil company Cupet to cut operations at its 65,000-barrel-per-day Cienfuegos refinery, where Venezuelan state oil company PDVSA had a 49-percent stake until August. It only refined 24,000 bpd of crude last year, according to official numbers.

Along with the drop in volume, the quality of the crude PDVSA had available for export also changed to heavier grades than Cuba’s refinery was used to.

Cuba bought the light Algerian crude for the first time in 2016 to blend with the heavier oil. PDVSA had previously supplied Cuba with a few cargoes of other light foreign crude grades.

Cuba has also been buying oil products from Russia’s Rosneft , which recently started talks with the Cuban government on exploring partnerships there. (Reporting by Lamine Chikhi in Algiers and Julia Payne in London; Additional reporting by Marianna Parraga in Houston; Writing by Ulf Laessing; Editing by Adrian Croft)

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