Argentina Crude Exports Poised to Hit Record

Maritime Activity Reports, Inc.

April 27, 2016

Argentina's oil producers have shipped record volumes of crude this month, spurred by a new government subsidy that has also prompted state-owned oil company YPF to return to the export market for the first time in years.

The surge in shipments abroad comes just a month after Argentina's new president, Mauricio Macri, introduced measures to help oil exporters as part of sweeping policy changes aimed at boosting investment and opening the South American nation's economy after years of heavy controls on trade.
Exports are expected to reach a record 91,000 barrels per day (bpd) of crude in April, including two cargoes sold by YPF to China and barrels shipped by private producers, according to a source.
Argentina exported 29,000 bpd in March and 30,000 bpd in April last year, according to Thomson Reuters Trade Flows data. After a two-year hiatus, YPF is in April joining other exporters of Escalante heavy crude, including Pan American Energy, ENAP Sipetrol and Tecpetrol.
In October the country exported 65,000 bpd, including large cargoes to China and India, according to data that comprises sales made from late 2014 to April 2016.
The main impetus for the flurry of sales is likely a $7.50 brown per barrel payment that the government gives exporters if international oil prices stay below $47.50 per barrel. The deals may also reveal that the nation's producers have excess crude to export because of lower input to domestic refineries.
The volumes are still tiny compared with those of major exporters such as Russia and Saudi Arabia, and only a small portion of the nation's 700,000 bpd of output in recent years. Argentina's growing exports could add to a global oversupply estimated at 1.5 million bpd, putting further pressure on prices.
The exports also contrast with Argentina's appetite for crude imports since 2014, when the country lifted restrictions on oil imports to reduce purchases of refined products while feeding its domestic refineries with better crude.
The country is struggling to attract investment needed to increase oil production and reverse its position as a net oil importer.
On Their Way
The two cargoes of Escalante crude sold by YPF and private companies were loaded in April at the Caleta Cordova port, with China's Qingdao terminal as their destination. A third cargo is sailing to a terminal operated by Norway's Statoil in the Bahamas, according to the data.
The first cargo, on tanker Maran Penelope, include 200,000 barrels sold by YPF to PetroChina and 700,000 barrels sold by Pan American Energy. It is scheduled to arrive in China in mid May.
The second cargo, on tanker Nordic Zenith, is carrying 925,000 barrels for China's CNR and it is expected to arrive in early June.
Even though YPF had not exported crude in recent years, Pan American Energy, Tecpetrol and ENAP Sipetrol have been selling at least 30,000 bpd of the same grade to international clients, some of them through tenders on the open market.
(Reporting by Juliana Castilla and Marianna Parraga; Written by Hugh Bronstein; Edited by Steve Orlofsky)
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