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Venezuela's PDVSA cuts light crude output after gas pipeline burst

CARACAS (Reuters) - Venezuelan state oil company PDVSA has slashed output of light crude by at least 30,000 barrels per day (bpd) after a pipeline used to transport associated natural gas burst, two people familiar with the matter said on Wednesday.

The suspension of wells producing light, sweet Santa Barbara crude in the northern part of eastern Monagas state could also threaten production of Venezuela’s main crude export blend, Merey 16. PDVSA has been using Santa Barbara to dilute the extra heavy crude from the Orinoco belt further south, the main component of Merey.

The interruption of output comes after a 36-inch pipeline providing natural gas to the Pigap II re-injection plant exploded on Saturday, in an incident the oil minister blamed on an attack but that Venezuela’s political opposition said was the result of years of underinvestment and lack of maintenance.

PDVSA has in recent months sought to boost crude production, which last year fell to its lowest levels in decades below 400,000 bpd, according to figures Venezuela provided to OPEC. Output had rebounded to 538,000 bpd by February, OPEC data show, and authorities had pledged to boost output to 1.5 million bpd this year.

Neither PDVSA nor Venezuela’s oil ministry immediately responded to requests for comment.

PDVSA halted production at 85 wells due to the explosion, said one of the people, who spoke on the condition of anonymity. Another source said some key projects had inventory of Santa Barbara to use as diluent, but it was not clear how long supplies would last.

U.S. sanctions on PDVSA enacted in 2019 as part of an effort to oust Venezuelan President Nicolas Maduro barred oil companies from sending diluents such as heavy naphtha to the South American country, forcing the state firm to switch to alternatives including Santa Barbara crude and condensates.

Reporting by Luc Cohen in New York and Deisy Buitrago in Caracas; Editing by Sonya Hepinstall

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