*

Extra supply set to double oil imports to 165,000 bpd this

month

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PDVSA only delivering oil to customers that prepay cargoes

or

fully exchange their value for diluent

*

Key agreement with M&P, Vitol has expanded exchanges

May 13 (Reuters) - Venezuela's PDVSA has ramped up

imports of heavy naphtha, a key fuel to dilute its extra heavy

oil output and make it exportable, ahead of the expiration of

U.S. licenses this month, according to shipping documents and

sources.

The U.S. Treasury Department has since 2022 allowed

Venezuela to import diluents for its heavy crude as part of oil

swaps with joint venture partners and customers, but in March

President Donald Trump's administration revoked all licenses

authorizing the deals, and gave companies until May 27 to wind

down transactions.

PDVSA has since only delivered Venezuelan crude to

customers that can prepay for the cargoes or fully exchange

their value for diluents including light crude and heavy

naphtha. Cargoes scheduled for U.S. Chevron were

canceled amid payment uncertainty last month.

Venezuela needs diluents to produce exportable crude grades.

The naphtha imports have replenished the state oil company's

stocks, securing diluents for coming months and compensating for

a lower output of domestic medium and light crudes that also are

used as diluents, company documents showed.

"There's so much heavy naphtha at this point that they have

had to interrupt cargo discharges at the Jose port to look for

available tanks, and use vessels for floating storage," a

shipper involved in import deals said.

The extra supply is set to double Venezuela's oil imports

this month to some 165,000 barrels per day (bpd) including

foreign crude, naphtha and other fuel, according to the

documents.

PDVSA last month agreed to a key deal with its partner

Maurel & Prom and trader Vitol, expanding the volume

of a long-standing crude-for-naphtha swap. Under the agreement,

the Venezuelan crude has gone to the United States, while U.S.

naphtha has been delivered to PDVSA.

PDVSA and Maurel & Prom did not reply to requests for

comment. Vitol declined to comment.

PDVSA has recently imported naphtha and light oil from other

sources as well, according to the documents.

As of this week, PDVSA's inventories of crude and naphtha at

its Jose port surpassed 9 million barrels, compared with 6.6

million barrels in February, the documents showed.

(Reporting by Reuters Staff)