Algeria’s state oil firm Sonatrach has extended its crude for oil products deal with major trading firm Vitol from the end of 2018 until the end of April this year, four sources familiar with the matter said.
As part of the deal that kicked off in February last year, Vitol would load up to 2 million barrels a month of crude and send back refined products like gasoline and gasoil in return.
One of the sources said Sonatrach could allocate more crude to Vitol based on the country’s fuel needs.
Vitol and Sonatrach did not immediately respond to requests for comment.
Vitol is one of the four companies that Sonatrach has shortlisted for a trading joint venture which is expected to be finalised by mid-year, sources familiar with those talks told Reuters.
The two companies have also jointly bid for a 50.1 percent stake in Greece’s biggest refiner, Hellenic Petroleum.
Sonatrach is the OPEC member’s only domestic oil producer with an output of over 1 million bpd of crude.
The deal with Vitol is an example of Sonatrach’s efforts to trim its domestic fuel bill that ballooned over the past few years.
Last year, Sonatrach acquired ExxonMobil’s 175,000 bpd Augusta refinery in Sicily, as part of the same efforts. The plant is currently undergoing maintenance.
Algeria’s downstream and trading expansion drive is part of a bigger trend among national oil firms to have more control over how their oil is sold and to reap more profits.
State-owned Abu Dhabi National Oil Company (ADNOC) sold a stake worth $5.8 billion dollars earlier this month to Italy’s Eni and Austria’s OMV in its refining business. The companies also plan to establish a new trading operation.
Saudi Aramco’s trading arm plans to open an office in London as soon as it expands its international business.