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UPDATE 2-Venezuela's PDVSA to assume portion of OPEC cuts
February 1, 2007 / 10:08 PM / 11 years ago

UPDATE 2-Venezuela's PDVSA to assume portion of OPEC cuts

(Recasts, adds details of Venezuela OPEC cuts)

CARACAS, Feb 1 (Reuters) - Venezuelan state oil company PDVSA will assume part of the nation's OPEC cut commitments, the oil minister said on Thursday, splitting Venezuela's cuts of about 195,000 barrels per day (bpd) with four Orinoco heavy crude projects.

The Orinoco projects, joint ventures between PDVSA and oil majors like Chevron (CVX.N) and Exxon Mobil (XOM.N), turn some 600,000 bpd of tar-like Orinoco oil into synthetic crude that can be processed by traditional refineries.

Venezuela's oil minister Rafael Ramirez had previously said the OPEC cuts would shave 106,000 bpd off the Orinoco joint ventures' production, but had not specified where the remaining 89,000 bpd would come from.

"What we have in the (Orinoco) belt we are going to keep cut, plus PDVSA's own production to complete the level of the cut," Ramirez said.

Venezuela in October agreed to cut 138,000 bpd as of Nov 1, then signed on for an additional 57,000 bpd cut that took effect on Thursday.

PDVSA official production figures show the company pumping around 3.3 million bpd, but international observers such as the U.S. Department of Energy say output is only around 2.6 million bpd.

Venezuela, the No. 4 oil exporter to the United States, has hit the four heavy crude upgrading projects with most of its OPEC cuts, forcing one of the projects to declare force majeure on its supply contract.

The four projects include investment from Exxon Mobil, Conoco Phillips (COP.N), BP Plc (BP.L), Chevron Corp., France's Total (TOTF.PA) and Norway's Statoil (STL.OL).

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