European refiner Nynas AB will cease imports of Venezuelan crude following modifications to a license permitting it to operate underneath U.S. sanctions, the company stated Monday, adding it was looking to switch to different sources of oil.
Nynas, controlled by Venezuela’s state-run PDVSA and Finland’s Neste Oil, operates specialty refineries in Sweden, Germany, and England mostly for asphalt production.
In January, the refiner acquired a license from the U.S., allowing it to function under sanctions imposed on its parent firm, PDVSA. However, the Treasury Division last week launched modifications to the permit effective instantly.
The modified model of license GL 13D, which allows Nynas to function through next year April, said it doesn’t authorize “any transactions or dealings associated with the acquisition of Venezuelan-origin petroleum or petroleum products, immediately or indirectly, by Nynas or any of its subsidiaries.”
Nynas further stated it’s processing other crude grades, including oil from the North Sea and Australia, and it has started a “flexibility program” at its refineries to switch to various crude oil and raw materials fully.
Nynas largely buys and processes naphthenic crudes, that are good for asphalt manufacturing and likewise are troublesome to supply. Venezuela’s Western crude grades had historically been Nynas’ primary source of oil.
The withdrawal of the supply contract between PDVSA and Nynas could constrain the Venezuelan state firm’s dwindling cash flow while adding to mounting records of unsold oil that have forced it to cut output in recent months.
Nynas is one of only two clients of PDVSA’s Western crudes left after sanctions and among the few cash-paying clients to the state-run oil firm.