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Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

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Venezuela Starves Domestic Oil Refineries To Supply Cuban Orders

Venezuela

Venezuela is starving its own refinery to send Mesa 30 crude to Cuba and Curacao, according to a new report by Reuters.

The 187,000-barrel Puerto la Cruz facility in Venezuela is currently operating at 16 percent capacity—or 29,500 bpd of gasoline and residual fuels—due to massive shortages of raw materials. PDVSA, the state-run oil and gas company, announced in March that it had resumed shipments to Cuba after an eight-month hiatus.

Mesa 30 is traditionally used to dilute heavy oil extracted from the Orinoco Belt, which is used in several processing facilities in Venezuela. Falling oil output—due to a government bankrupted by three years of low oil prices—has left refineries lacking funds to complete scheduled maintaining.

"Diverting crude is one of the causes of the refinery's status, but there is also lack of maintenance," Jose Bodas, a union leader at Puerto la Cruz, told Reuters. Last month, he warned the government about the dramatic reduction in refining activity. This time around, he is adding spare parts to his wish list of necessary supplies.

The Isla refinery in Curacao suffered a fire two weeks ago. Now the 335,000-bpd facility struggles to restore output due to the serious damage.

Related: OPEC Cuts Send Russia’s Oil Heartland Into Decline

"Isla is putting its thermal cracker unit in service to be used for crude distillation... so it can process 40 percent of the crude bound for the crude distillation unit number 3," the refinery said earlier this week.

President Nicholas Maduro’s regime has faced months of protests due to import cuts that have left the country without day-to-day supplies and medical goods. Washington is studying options for imposing sanctions against Venezuela’s energy sector as a way of pressuring the South American country’s government to step down. No decision has been made yet, two sources from the Trump administration told Reuters yesterday.

By Zainab Calcuttawala for Oilprice.com

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