Offtaking of crude oil relating to loan agreement for PDVSA

Aug. 6. 2007
Mitsui & Co., Ltd、Marubeni Corporation

Marubeni Corporation (hereinafter “Marubeni”), together with, Mitsui & Co., Ltd. (hereinafter “Mitsui”) made and entered into an agreement with Petróleos de Venezuela, S.A. (“PDVSA”), a company which is involved in Venezuelan crude oil and petroleum products transactions, to jointly purchase 2 million barrels of Venezuelan crude oil for Japan based on the Master Offtake Agreement which was announced on February 23, 2007.

The Master Offtake Agreement was concluded between Mitsui/Marubeni and PDVSA, together with the Loan Agreement, which is supported by Japan Bank of International Cooperation, with an advanced loan amount of US$3.5 billion over a period of 15 years for PDVSA. This agreement was made based on the Master Offtake Agreement which allowed Marubeni and Mitsui to have the sole right to negotiate offtake terms for crude oil and petroleum products. The Loan Agreement and Master Offtake Agreement will contribute to the diversification of crude oil importers. Proceeds from the sale of Venezuelan crude oil will be appropriated to the repayment of the loan.

The VLCC carrying the crude oil will leave the loading port in Venezuela around mid- August, and the cargo will be delivered to Nippon Oil Corporation, Idemitsu Kosan Co., Ltd., and Kyokuto Petroleum Industries Co., Ltd., which is a Mitsui subsidiary company, and others in early October. The crude oil is known as Santa Barbara, a high-quality, light sweet crude oil which consists of high value-added light products, such as gasoline and naphtha. Although Japan imported crude oil from Venezuela during the second oil crisis, this will be the first time for Japan to import petroleum products based on a Master Offtake Agreement.
Venezuela is the world’s 8th largest crude oil producer, and PDVSA is a 100% government-owned oil company which produces 2.4 million barrels of crude oil a day. Mitsui and Marubeni will try to offtake crude oil and petroleum products steadily from Venezuela.

Top of Page