CARACAS/HOUSTON (Reuters) - Venezuela’s state-run PDVSA [PDVSA.UL] and partners have halted operations at two upgraders that convert extra-heavy oil into exportable crude and plan to stop work at two others, according to six sources close to the projects, a move aimed at easing the strains from a tanker backlog that is delaying shipments.
Venezuela’s problems exporting oil this month led PDVSA to notify customers it would begin sea-borne transfers in an attempt to ease a bottleneck at its ports, where more than 70 vessels are waiting to load about 23 million barrels of oil.
PDVSA also told clients they could not send new tankers until the ships waiting to load were serviced.
In the January-April period, Venezuela’s crude production fell to the lowest annual average in over three decades and oil exports fell 28 percent to 1.19 million barrels per day (bpd). The export troubles are rising as the cash-strapped nation faces claims on its assets from creditors, and an outflow of skilled workers and energy service companies due to hyperinflation and unpaid bills.
If PDVSA cannot alleviate the shipping bottleneck, the company and its joint ventures could be forced to slow or temporarily pause production at some Orinoco Belt oilfields, further cutting crude revenue, the life-blood of the OPEC nation.
To avoid that, PDVSA has been taking advantage of maintenance projects at its crude upgraders, which can convert up to 620,000 barrels per day (bpd) of extra-heavy oil into exportable grades, to schedule additional work, the sources said.
PDVSA President Manuel Quevedo, who is also Venezuela’s oil minister, recently said the upgrader at Petro San Felix would be halted for repairs in July, but the program was moved ahead to this month.
Petromonagas, a venture between PDVSA and Russia’s Rosneft, also is expected to start a major maintenance project in June after a two-month delay, one of the sources said.
Venezuela’s largest upgrader, Petrocedeno - operated by PDVSA, Total and Equinor - was halted this week for repairs and a lack of raw materials. The companies turned the stoppage into an expanded maintenance project.
Petropiar, a venture between PDVSA and Chevron Corp, also halted work this month due to lack of spare parts.
PDVSA and its partners typically produce diluted crude oil (DCO), made with extra-heavy crude and imported naphtha, during maintenance, but production and export levels usually decline compared with regular output.
Most of Venezuela’s upgraded oil is sold on the open market, not through long-term supply contracts.
PDVSA’s U.S. unit Citgo Petroleum has been importing DCO in recent weeks to cover a portion of the upgraded crude it has not been receiving from joint ventures.
The subsidiary is buying more imported crude, including Ecuadorean and Colombian grades, on the open market to supply its Gulf Coast refineries.
Two of PDVSA’s largest customers, India’s Reliance and Nayara Energy, received 14 percent less heavy Venezuelan crude last month, falling to an average of 342,000 bpd.
Reporting by Deisy Buitrago in Caracas and Marianna Parraga in Houston; Editing by Leslie Adler and Tom Brown