Exclusive: Venezuela oil production was 2.99 million bpd in August

CARACAS Thu Sep 13, 2012 1:00pm EDT

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CARACAS (Reuters) - Venezuela's oil production has not risen above 3 million barrels per day (bpd) this year, despite the assertions of President Hugo Chavez's government, according to an internal report seen by Reuters.

Chavez's socialist administration wants to ramp up the OPEC nation's crude output - its main source of revenue - but has not published certified production data since March 2011, making it difficult to measure its progress.

Energy Minister Rafael Ramirez said last week that average output was 3.13 million bpd, below the 3.5 million bpd target for the end of the year. The internal report showed production at the end of last month was lower still, at 2.99 million bpd.

PDVSA did not immediately respond to a request for a comment on the contents of the report.

The performance of the giant company is a charged topic in the politically polarized South American country that boasts the biggest proven oil reserves in the world.

PDVSA contributes tens of billions of dollars a year to Chavez's signature social projects, funding everything from free health clinics to sports and cultural events.

Critics say that has led the company to neglect vital investments in its operations, holding back production and contributing to the accidents such as last month's deadly explosion at the Amuay refinery. The company denies it.

With Chavez seeking a new six-year term at an election on October 7, the financial demands on PDVSA have mounted.

ORINOCO AMBITIONS

Venezuelan's crude production fell to its lowest point in 2010 since a strike eight years earlier. In 2011, it reversed part of that decline and the government has high hopes for a string of projects to tap the enormous Orinoco heavy crude belt where the U.S. Geological Survey says there are some 513 billion barrels of crude that could be recovered -- if costs were not an issue.

They include partnerships with U.S. major Chevron (CVX.N), Spain's Repsol (REP.MC) and a consortium of Russian companies.

According to the internal report, production at the end of August was well below the month's target of 3.15 million bpd.

Venezuela said in March 2011 it would stop publishing output and export data certified by an independent auditor. That added to skepticism over the government's own assessments, which are routinely higher than figures provided by bodies including OPEC and estimates from industry experts.

The numbers in the report are closer to OPEC's view on Venezuela, which puts production at 2.84 million bpd last month.

The South American nation says six Orinoco joint ventures are due to start production of about 100,000 bpd before the end of the year. But that will not be enough to meet PDVSA's overall goal of 3.5 million bpd.

PDVSA's failure to meet its output goals suggests it continues to have difficulties with production from crude fields around Lake Maracaibo, the nation's traditional oil heartland, and at older Orinoco fields where it has projects with France's Total (TOTF.PA), Norway's Statoil (STL.OL) and others.

The internal report also showed that natural gas production - important for electricity generation in a country where power cuts are common - was also lagging behind the company's targets.

A PDVSA executive said on Thursday that output was now 7.5 billion cubic feet per day, more than the 7.2 billion listed in the report, but still below the August target of 7.6 billion.

(Writing by Daniel Wallis; Editing by Sofina Mirza-Reid)

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