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Energiesnet.com 07 02 2024
Venezuela’s crude output has risen to average 908,000 b/d in June, up 10,000 b/d from May and up from 760,000 b/d in October 2023, when the US partially eased sanctions on the country’s oil and gas sector, according to a preliminary PDVSA production report reviewed by S&P Global Commodity Insights June 28.
Sanctions were snapped back on April 17 after Venezuelan President Nicolás Maduro failed to meet his commitment to make progress toward a free and fair election in July, although exceptions were made for Chevron’s joint ventures with Venezuela’s state oil company PDVSA, which have driven output gains.
Production from the Chevron/PDVSA JVs averaged 197,000 b/d in June, according to the report.
The June production figure includes 54,000 b/d of imported diluent and 47,000 b/d of locally produced condensates, both of which are blended into PDVSA’s heavy crudes.
According to S&P Global Commodities at Sea, Venezuela imported 700,000 barrels of naphtha from Spain in June. Naphtha imports have risen since sanctions were lifted last October. In May, for instance, Venezuela imported 1.6 million barrels from the US, up from 620,000 barrels of total naphtha imports in October 2023.
Iran used to be a regular supplier of condensates to Venezuela for blending purposes, although CAS shows no imports from Iran after June 2023 likely because of US sanctions placed on Iran.
While Venezuela’s oil output has risen, production has fallen from a peak of 3.234 million b/d in 1998, according to S&P Global data.
Orinoco Belt output rises
Output of extra heavy crude in the Orinoco Belt, Venezuela’s largest operating field, rose to 535,000 b/d in June, up 25,000 b/d from May, according to the report.
Of the total production in the Orinoco Basin, 385,000 b/d was from PDVSA JVs. Orinoco Belt output included the 54,000 b/d of imported diluents used to upgrade the crude into Merey-16 or DCO (diluted crude oil), according to the report.
Venezuela exported 687,000 b/d of crude in June to date, 523,000 b/d of which was Merey-16, CAS data shows.
The production report did not give details about the JVs in the four main blocks in which the Orinoco Belt oil basin is divided: Carabobo, Ayacucho, Junín and Boyacá.
However, the report included the Petropiar JV (PDVSA 70%, Chevron 30%), where output rose to an average of 92,000 b/d in June.
The report added that the upgraders at Petrocedeño, Petro San Felix (now Petrolera Roraima) and Petromonagas, located in the north of Anzoategui state, remained halted without a restart date. The only upgrader in service is Petropiar, where major maintenance is two years behind schedule, according to the report.
Boscan crude heading to US
Output in western Venezuelan fields fell to 212,000 b/d in June, down 23,000 b/d from May. Of the total production in the west, 42.5% came from the Boscan field, operated by a joint venture between PDVSA (60%) and Chevron (40%).
Approximately 30 million barrels of Boscan crude have been exported to the US since Chevron was authorized by the Office of Foreign Assets Control (OFAC) to restart operations in Venezuela at the end of 2022, according to a statement by Venezuelan president Nicolas Maduro during a visit to the JV’s facilities, located in Zulia state, on June 27.
“Ten contracts to diversify investment. Investors from the United States, from Asia, from Africa, from all of Latin America and the Caribbean should know that Venezuela is the place of opportunities, where their investments are guaranteed,” Maduro said.
The output in the fields located in the Monagas state in eastern Venezuela rose to 161,000 b/d in June, including 4,500 b/d produced by the subsidiary PDVSA Gas. In May the output at Monagas averaged 153,000 b/d.
Monagas state produces the Mesa and Santa Barbara light crudes that PDVSA uses in its refining system and also to dilute extra heavy crudes from the Orinoco Belt.
Some international companies such as Chevron, Repsol and Maurel & Prom have been granted special licenses to operate in Venezuela by the OFAC of the US Treasury Department, according to previous reports.
Venezuela expects to increase its oil production to 1.235 million b/d in December, according to the PDVSA president Rafael Tellechea.
However, the political situation in Venezuela remains uncertain ahead of presidential elections scheduled for July 28.
According to a recent New York Times story, Maduro is lagging in polls behind his main opponent, Edmundo González. However, Maduro is likely considering ways to remain in power.
While the Biden administration on May 31 rebuked a decision by Venezuela to withdraw an invitation for European Union officials to observe the July 28 election, it is unlikely to change its current sanctions policy. Biden is keen on keeping a lid on gasoline prices heading into the November presidential election.
spglobal.com 06 28 2024
