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Breaking News:

Chevron Plans Further Capex Cuts for 2017

PDVSA Denies Cutting Oil Exports to Cuba

Refinery Cuba Cienfuegos

Officials with PDVSA rejected allegations that the Venezuelan state-owned oil firm plans to lower crude exports to Cuba, according to Xinhua.

“There has not been any issue or reduction with the supply of Venezuelan oil to Cuba. There is a technical and engineering difficulty at the Cienfuegos refinery,” said Luis Morillo, PDVSA's general manager in Cuba, at a press conference on Tuesday.

Morillo added that production had been cut to minimum levels at PDVSA’s jointly run refinery in the Cuban city of Cienfuegos.

"This is a technical problem all refineries are facing. We will close certain areas of the plant for 120 days over the course of the year to fix these issues and update certain processes," he mentioned.

Recent reports alleged that PDVSA in the first half of 2016 slashed oil exports to Cuba by 40 percent to some 53,500 barrels per day. Around 4 percent of Venezuelan oil exports are sent to Cuba, and the island is a member of the Petrocaribe alliance of nations receiving preferential terms for oil. Yet PDVSA has also purportedly lowered total shipments of oil to Cuba by 19.5 percent amid difficulties in the production of Venezuelan oil.

Related: EIA Expects Uptick In U.S. NatGas Production As Prices Soar

Cuban President Raul Castro admitted last Friday his worry over the effects of the weakened Venezuelan financial state on his nation. The island’s economy grew at a less-than-anticipated rate of 1 percent in the first six months of this year, partly as a result of a “contraction in fuel supplies agreed with Venezuela.”

The Cuban government further warned of the likelihood of energy rationing in the upcoming months in order to reduce electricity consumption by 6 percent without affecting residential supply.

“We are going to face limitations in the second semester,” said Vice President Marino Murillo to the state press though important revenue-generating industries including tourism and nickel production will not see cuts.

By Erwin Cifuentes for Oilprice.com

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