The 955,000-barrels-per-day Paraguaná Refinery Complex, Venezuela's largest refinery center, stopped all operations early on Thursday after a fire and a blackout at the site, multiple sources close to the facility's operations told Reuters.
A small fire erupted at a vacuum tower at the Amuay oil refinery, which, together with the Cardon refinery, makes up the huge refinery complex. The blackout is widespread in the complex, and all operations are halted, Reuters' sources said. Venezuela's state oil firm PDVSA, the operator of the large refining complex, was trying to restore power in the refineries early on Thursday, according to the sources.
Reduced oil processing rates in Venezuela will exacerbate an already precarious situation with fuel supply in the country, which is home to the world's largest crude oil reserves.
Over the past decade, Venezuela's oil industry has crumbled due to mismanagement, corruption, and a lack of investment in maintenance. Additionally, the U.S. sanctions on Venezuela's oil industry and exports, enacted by former President Donald Trump, have also crippled the industry and discouraged foreign operators from working in the country.
Earlier this month, reports emerged that the United States was considering an easing of sanctions on Venezuela in order to increase the flow of Venezuelan oil to U.S. and European markets, the Wall Street Journal reported, citing unnamed sources in the know. The sanction relief is aimed at Chevron, which used to operate in Venezuela, but sanctions made it pull out of the country.
Thursday's blackout at the Paraguaná Refinery Complex was not the only incident at the site this year. In July, the Amuay refinery, with a capacity to process 645,000 bpd, was again halted due to a blackout. At the time, Amuay was actually the only refinery that was producing gasoline at the complex after the Cardon refinery was out until a reformer fault was being fixed.
By Charles Kennedy for Oilprice.com
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