Venezuela Cannot Service Its Oil Fields – no Funds
Due to problems in the preparation of extra-heavy Venezuelan oil for export, its volumes in August decreased by 38% compared to three-year figures for the same period.
The state company PDVSA was unable to ensure the uninterrupted operation of facilities for the preparation of heavy oil produced in the Latin American country. Heavy and extra-heavy oil from Venezuela requires additional processing into export grades (mainly by blending) for sale on the market. However, PDVSA’s lack of funds, old and poorly maintained infrastructure, and U.S. sanctions have put the operation of the facilities in Venezuela in question.
Total oil exports from Venezuela for August showed 544,000 b/d, down from 877,000 b/d in July, according to LSEG Eikon vessel tracking data. Exports from Chevron’s Venezuelan division totaled 147,000 b/d, down from 161,000 b/d in July. Venezuela also exported about 214,000 tons of by-products of oil refining and petrochemicals, compared with 412,000 tons in July, the data show.
So, at the production of the Venezuelan PDVSA with the Chinese CNPC, two oil mixing units failed. At the PDVSA production, the American Chevron was repairing the vacuum unit. The PDVSA unit and Russia’s Roszarubezhneft ran out of diluents, causing it to be decommissioned last month. Another refinery in the Orinoco belt, Petrocedeno, cut oil refining due to boiler problems.
However, months earlier, in July, Venezuela showed a slight increase in production for light oil grades: 11% more than in January, to 810,000 bpd.
In August, supplies of crude oil and petroleum products to Cuba increased from 53,000 bpd to 65,000 bpd in total, as well as exports of naphtha to 800,000 barrels, including supplies to Chevron and the Italian Eni (to Italians – on oil swaps).
Analysts at the oil trader Vitol, we recall, believe that oil supplies from Venezuela will increase in the near future, as the United States removes some export restrictions for the Latin American country. Time will tell whether Venezuela will be able to set up work at its mining and processing facilities.
