(Reuters) - Venezuela’s state-run oil firm PDVSA plans to shut an oil upgrader in April for major maintenance work, requiring higher imports of diluents for its extra heavy oil output, according to an internal report seen by Reuters.
The country increasingly relies on purchases of diluents to make its heavy oil exportable because its own production of light crude has fallen in recent years. PDVSA’s refining output also is declining amid maintenance outages and a lack of spare parts.
Oil accounts for over 90 percent of Venezuela’s export revenue and falling output has led to economic chaos, soaring inflation and crippled public services in the once prosperous Andean country.
The planned maintenance work would sharply increase naphtha imports to 83,000 bpd in April from 64,500 bpd in March, according to the document, which does not specify the duration of the shutdown.
The 150,000-barrel-per-day (bpd) Petromonagas oil upgrader, a joint venture with Russia’s Rosneft located at Venezuela’s Orinoco Belt, was partially halted from November through mid-December for an earlier maintenance project.
PDVSA has boosted purchases of foreign crude and refined products since December mostly by swapping its own crude and fuel oil for the imports after financial sanctions imposed by the United States sharpened a long-standing cash crunch.
Venezuela’s President Nicolas Maduro last week said the country intends to start selling its oil in a new cryptocurrency recently blocked by the United States, but he did not elaborate.
About a third of Venezuela’s oil imports consist of heavy naphtha, mostly shipped from the United States.
Even amid U.S. financial sanctions on Venezuela, announced in August, PDVSA has continued buying naphtha from U.S. refiners and traders. But measures under consideration by President Donald Trump’s administration, as part of beefed up sanctions, include a potential halt in sales of diluents and other products to PDVSA.
Separately, PDVSA expects to increase crude refining in April to 725,000 bpd compared with 701,000 bpd planned in March due to improved operations at the 645,000-bpd Amuay refinery and at the 335,000-bpd Isla refinery on the island of Curacao.
The higher processing level represents just 44.7 percent of PDVSA’s capacity in Venezuela and the Caribbean. The company’s refining operations have remained well below rated capacity in recent years due to lack of crude and spare parts, a brain drain and delayed maintenance.
PDVSA’s goal of increasing output depends on pushing up processing levels up at one of Amuay’s five crude distillation units, while another is expected to remain in extended maintenance.
At Isla, PDVSA plans to restart one of its three crude distillation units in late April after receiving enough cargoes of imported oil to be processed there, which would boost its crude input to 91,000 bpd compared with 56,000 bpd in March.
One of Isla’s vacuum distillation units and two hydrotreating units also are expected to resume operations in April, but its alkylation unit and the catalytic cracker would remain offline due to the refinery’s lack of steam and other industrial services, the document says.
PDVSA’s smallest refineries, in Puerto La Cruz and El Palito, are planned to run next month at 66 percent and 61 percent of their installed capacities, respectively, according to the report.
PDVSA also expects Venezuela’s domestic fuel consumption to average 425,000 bpd in April, slightly more than the 431,000 bpd of March.
Reporting by Marianna Parraga, editing by G Crosse and Tom Brown