Phillips 66 claims that two Gulf Coast refineries are capable of processing 100,000 bpd Venezuelan crude

Kevin Mitchell, Chief Financial officer of Phillips 66, said on a Tuesday conference call that the refiner can use Venezuelan crude in two U.S. Gulf 'Coast refining facilities as production increases.

Mitchell, speaking at the Goldman?Sachs?Energy, CleanTech & Utilities Conference, said that its Lake Charles refinery and Sweeny refining plant in Texas can process 100,000 barrels of Venezuelan crudes each day.

Donald Trump announced over the weekend that the U.S. will "take control" after U.S. troops ousted Venezuelan president Nicolas Maduro. This could allow U.S. companies to access the vast oil reserves of Venezuela.

A source reported that the?Trump Administration plans to meet executives from U.S. Oil Companies later this week to talk about boosting Venezuelan oil production. The world's biggest oil reserves are located in Venezuela, but only 1% of the global supply comes from this country.

The nationalization of Venezuela's oil sector and the ensuing sanctions led to mismanagement and a limited amount of foreign investment. This resulted in a massive drop in production.

Mark Lashier, CEO of Phillips 66, said he saw a potential for longer-term growth as Venezuela – which produced as much as 3.5 millions bpd during the 1970s – ramped up production.

Lashier stated that "we have refineries built for the long term" to process this crude. Lashier added, however, that "years if not decades" would be needed for upstream companies' investment to?realize its full potential.

He said, "This is a chance for Venezuela to get back to the capitalist folds and bring their economy to their people on a long-term basis."

Venezuelan crude oil is a heavy sour with a high sulfur content. It can be used to produce diesel and heavier fuels but at fewer margins than other grades.

Analysts have noted that U.S. refiners like Phillips 66 and Marathon Petroleum will benefit from the increased Venezuelan oil production, as their refineries on the Gulf Coast were built to process this grade. Reporting by Vallari Shrivastava, Pooja menon and Varun sahay in Bengaluru. Editing by Tasim zahid and Shasim Kuber.

(source: Reuters)