Tipco Asphalt Public Company Limited (TASCO) has announced that the company has completed its wind-down of crude procurement from Venezuela per the request of the U.S. State Department.
In September 2020, the US forced the company to stop purchasing crude oil from Venezuela. The US also warned that the company could face a sanction if not compromised.
Mr. Chaiwat Srivalwat, Chief Executive Officer of Tipco Asphalt Public Company Limited (TASCO), revealed that the US State Department has contracted the company and asked TASCO to stop the procurement of Venezuela crude oil immediately. The company has shared with them in writing details of the procurement of Venezuela crude oil, however, after review of TASCO comprehensive written explanation, the US State Department requested the company to wind down the crude oil procurement from Venezuela by the end of November 2020, warning the company that, in the event of non-compliance, TASCO could be subject to US sanction.
In order to avoid the sanction, TASCO is taking steps to comply with such requests. Therefore, the Kemaman refinery will have to shut down temporarily until the sanctions against Venezuela are lifted or the company finds an alternative feedstock.
In December 2019, TASCO was contracted by the US Embassy in Thailand and the company has shared with them in writing details of the procurement of Venezuela crude oil in January 2020.
The refinery in Kemaman, Malaysia is specifically designed to refine heavy crude oil from Venezuela. Since its commissioning in 20019, 90% of the refinery’s feedstock was sourced from Venezuela.
The analysts stated that there are committed contract sales volume until December 2020 and hence management expects limited or no impact to TASCO’s contact sales.