Spain's Repsol beginning 'new dynamic' in relationship with Venezuela

By Isla Binnie and Marianna Parraga

MADRID/HOUSTON (Reuters) - Spain's Repsol is starting a "new dynamic" for its business in Venezuela, where U.S. sanctions had blocked the oil firm from having access to the South American country's heavy crude for its refineries, the company's CEO said on Thursday.

Repsol resumed imports of Venezuelan crude this month after a two-year pause forced by Washington's sanctions on President Nicolas Maduro's government, as the U.S. State Department granted authorizations to European companies in the OPEC nation.

Eni has since June received a total of 3.6 million barrels of Venezuelan crude from state-run oil company PDVSA, that way settling a portion of pending debt to the Italian firm, according to PDVSA's documents and tanker tracking data.

Most crude has been later delivered by Eni to Repsol, which has a larger capacity for refining heavy sour crude grades.

"It seems to me we are entering into a new dynamic relating to Venezuela," Repsol CEO Josu Jon Imaz said during the presentation of the company's second quarter results.

"The return of cargoes from Venezuela is good news for our refining (business) as the quality of those crudes matches perfectly with the high complexity of our system," he added.

The Spanish company has so far received almost 3 million barrels of Venezuelan oil, the executive said, without elaborating on how large volumes to be imported will be.

The Venezuelan heavy crude will help Repsol feed its refineries' most complex units, providing better economics for the facilities.

"We will have a higher capacity to fill our cokers, probably optimizing in a better way the conversion units that we have," Imaz said.

Repsol cut its use of gas at its refineries - key for converting crude into motor fuel - by 1 billion cubic meters (bcm), and sought alternatives as Europe tries to curb demand in case of further supply disruptions from Russia, the company also said during its report of results.

(Reporting by Isla Binnie in Madrid and Marianna Parraga in Houston; Editing by Nick Zieminski)