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Despite all the hype around…

Venezuela's Oil Production Crippled By Another Power Outage

According to unnamed sources who spoke to Reuters, a power outage this week stopped operations at the Petropiar crude upgrader that PDVSA runs via a joint venture with Chevron. Separately, PDVSA postponed the restart of the Petromonagas and Petrocedeno facilities because of depressed oil prices.

Petromonagas is a joint venture of PDVSA with Rosneft, which earlier this year sold all its interests in Venezuela to a newly formed state firm called Roszarubezhneft. Petrocedeno is a partnership between PDVSA, French Total, and Norway’s Equinor.

A fourth upgrader in the Orinoco Belt, Sinovensa, was also halted this week and later restarted, according to the Reuters sources, but at a reduced rate of just 72,000 bpd.

Crude oil upgraders are facilities where extra heavy oil of the type that is produced in Venezuela’s Orinoco Belt is mixed with lighter hydrocarbons to make it liquid and easier to transport.

The upgrader problem is the latest in a string of events that suggest Venezuela’s production, which already has fallen to some 700,000 bpd, will likely fall further, especially if prices stay at current levels.

The country is in the grips of a major gasoline shortage as refineries are unable to operate at run rates higher than 10 percent because of a shortage of diluents necessary for the production of fuels as well as an urgent need for repairs.

What’s more, the only two U.S. oil companies allowed to continue doing business in the Latin American nation were last month ordered by Washington to pack up and get out, which puts a question mark over the future of the Petropiar joint venture and means more oil production declines.

Amid all this, President Maduro once again reshuffled the government, appointing the former Minister of Industries and National Production Tareck El Aissami as the new oil minister.

By Irina Slav for Oilprice.com

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