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Canada Job Losses In Resource Sector Hit All-Time High

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As Canada’s natural resource sector…

Venezuela’s Oil Industry Implosion Reaches Chevron

Massive blackouts in Venezuela in March and April have drastically reduced oil production at Chevron’s biggest oil joint venture in the country, Bloomberg reported on Thursday, citing data that it had compiled from company sources.

Chevron holds a 30-percent stake in Petropiar, a joint venture with PDVSA in Venezuela’s Orinoco Belt operated by the Venezuelan state oil firm. The project processes extra heavy crude oil from the Huyapari field and upgrades it to a lighter, higher-value synthetic oil.

Due to the numerous blackouts and the rationing of electricity in the Orinoco Belt over the past two months, Petropiar’s production averaged 74,000 bpd in the first two weeks of April, which was 44 percent below the average production in the first two weeks of January.

Petropiar has historically been one of the top producing projects in Venezuela and has a capacity of 190,000 bpd. The Chevron venture produced an average 132,000 bpd in January, but after the blackouts began in early March, production has drastically dropped and was even entirely offline for two days in a row, according to the data compiled by Bloomberg.

PDVSA expects a sharp decline in oil production in April, with the four upgraders operating in joint ventures with international majors running a lot lower than capacity, Reuters reported earlier this month, citing company documents and sources close to the company.

A string of blackouts in the last few weeks have caused extended outages at crucial oil facilities including the upgraders, which have a combined capacity of 700,000 bpd.

On top of the massive blackouts, Venezuela’s oil industry suffered in the past two months from the U.S. sanctions, the continued economic crisis, and the chronic underinvestment in its oil facilities.

Venezuela, one of OPEC’s members exempt from the ongoing production cuts, contributed inadvertently to the cartel’s mission to reduce global oil supply last month. Venezuela’s crude oil production plunged by 289,000 bpd from February to below 1 million bpd—to 732,000 bpd in March, according to OPEC’s secondary sources.

By Tsvetana Paraskova for Oilprice.com

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  • Frank Foley on April 26 2019 said:
    It was my understanding that Chevron was purposely helping cause the slowdown in Venezuela production to boost WTI pricing for their domestic US production?

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