Colombia reshuffles crude exports to weather low prices -sources

By Marianna Parraga
HOUSTON, Aug 5 (Reuters) - Colombia, Latin America's No. 4
oil producer, is changing the slate of crudes it exports in a
bid to offset the falling prices that are crimping the revenues
of its top oil companies.
The country has started to deemphasize exports of several
heavier crudes, mainly Castilla, and increase offerings of
Vasconia, a medium blend that fetches about $3.50, or 8 percent,
more per barrel.
But to lift output of Vasconia, Colombia must increase
imports of products such as naphtha and natural gasoline, which
are used as diluents to lighten the barrels for export.
State-run Ecopetrol ECO.CN has already started to make the
shift and has pushed independent producers in Colombia,
including Pacific Rubiales PRE.TO , to do the same, brokers and
industry sources said.
Colombian officials plan to carry out the change without
letting overall export volumes fall. The country sent more than
500,000 barrels a day to the United States in May, and shipments
are up more than 45 percent this year.
Ecopetrol typically buys naphtha on the open market to make
blends, while Toronto-listed Pacific Rubiales has increased
purchases of natural gasoline through tenders.
"Ecopetrol has asked several operators to cut the variety of
crudes being offered for exports," said an executive from a
company working in Colombia.
Both companies did not to reply to requests for comment.
Diluting heavy crudes to convert them into a medium blend
like Vasconia with 24 API degrees of density and less than 1
percent sulfur makes economic sense if naphtha and natural
gasoline are cheap enough, a trader said.
After penetrating Asia in recent years, Colombia is again
targeting the United States as U.S. imports wane from
traditional suppliers such as Mexico and Venezuela.
Colombian sales to the United States have been dominated by
heavy sour Castilla - with 18-19 API density and up to 2 percent
sulfur - going to refineries along the Gulf Coast, U.S.
government data show.
Traders say it will be tough to completely replace Castilla,
but Vasconia has started to make gains among oil companies in
the United States, including ConocoPhillips (NYSE:COP) COP.N , ExxonMobil
XOM.N , Tesoro Corp (NYSE:TSO) TSO.N , Royal Dutch Shell RDsa.L and
Lyondell Basell LYB.N .
Colombian medium-grade crudes landing in the United States
have risen to nearly 17 percent of all Colombian shipments so
far this year, up from 13 percent last year.
"Several refining companies are testing different grades of
Vasconia as they cannot easily find Castilla anymore," a trader
said.