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PdV CEO: La Cruz refinery at 90pc capacity

12 Oct 2017, 9.09 pm GMT

PdV CEO: La Cruz refinery at 90pc capacity

Caracas, 12 October (Argus) — State-owned PdV said its 190,000 b/d Puerto La Cruz refinery is processing up to 170,000 b/d, or almost 90pc of nameplate capacity, after completing a general maintenance program launched in July.

The refinery's distillation unit was restarted this week and two more processing units will restart next week, PdV's chief executive Nelson Martinez said during a tour of the refinery.

Puerto La Cruz currently is producing 21,000 b/d of 95 RON gasoline, 31,000 b/d of 91 RON gasoline, 30,000 b/d of "automotive diesel," 10,000 b/d of Jet A-1, 8,000 b/d of light naphtha and 70,000 b/d of "other distillates and residuals," according to PdV.

If accurate, these numbers would represent a remarkable turnaround for PdV's downstream sector, which just a month ago was processing barely 390,000 b/d or about 30pc of its local nameplate capacity of 1.3mn b/d. That includes Puerto La Cruz, the 146,000 b/d El Palito refinery in Carabobo, and the 940,000 b/d CRP refining complex in Paraguana that consists of the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardon refinery.

The Puerto la Cruz output numbers also suggest that PdV has solved the refinery's main operational problem for 2017: a light crude supply deficit. As recently as June the refinery was processing only 30,400 b/d, or 16pc of nameplate capacity, because of a drop in light crude supply caused in March by PdV's decision to divert 34,000 b/d of Mesa 30 to Cuba. Inoperative processing units were "a distant secondary factor after the lack of crude supply," a PdV official at the refinery said.

PdV currently ships about 55,000 b/d of crude and products to Cuba, the energy ministry said.

Diverting 34,000 b/d from Puerto La Cruz to Cuba nearly forced PdV to shut down the refinery for many months because Venezuela lacks sufficient light crude supply to also cover the refinery's supply needs, according to Futpv oil union official Jose Bodas, who works at the facility.

It's not immediately clear if PdV has rerouted the Cuba-bound Mesa 30 shipments back to the Puerto La Cruz refinery, or if it is importing light crude for the refinery, which produces heavily price-subsidized gasoline and diesel for the country's eastern states.

The energy ministry and PdV declined to comment.

But PdV's light crude output has not increased this year, an upstream executive in Maracaibo told Argus. "PdV's crude output is falling, not rising," he said.

PdV produced 313,000 b/d of light crude in 2016 compared with 487,000 b/d in 2012, a decline of 174,000 b/d or almost 36pc in five years, the company's 2016 annual report says. Last year's 313,000 b/d light crude output was almost 69pc, or some 687,000 b/d, below PdV's peak light crude output of about 1mn b/d in 1998.

PdV's production of medium grade crudes has dropped apace with falling light crude output over the past five years, averaging 573,000 b/d in 2016 compared with 875,000 b/d in 2012, a drop of 302,000 b/d or almost 35pc. PdV's medium crude output last year was 529,000 b/d or 48pc below peak 1998 medium output of 1.102mn b/d, the energy ministry's historical data sets show.

Almost the entire drop in PdV's light/medium crude output has been in Venezuela's oldest production areas around Lake Maracaibo in Zulia and the Furrial-Anaco crude and gas production areas in Monagas and parts of Anzoategui.

PdV's light/medium crude output has continued falling in 2017 because its financial difficulties — including almost $3bn of bonds due for payment at the end of this month and over $20bn in unpaid debts to oil services contractors and suppliers — are blocking efforts to restart wells.

"Lower production of light/medium crudes make up most of the over 280,000 b/d drop in PdV's crude production during the first nine months of the year," a PdV upstream executive in Maracaibo told Argus.

Futpv union leaders including Bodas and Ivan Freites, the senior union leader at the 940,000 CRP refining complex, attribute PdV's falling light/medium crude output on a combination of bad management, years of spending cuts in the older upstream areas of Zulia and Monagas, and a steady exodus of skilled workers fleeing the company and Venezuela itself for better paying jobs.

PdV head Martinez is trying to turn things around by enlisting Schlumberger, Halliburton and other oil services providers in projects to restart hundreds of shut-in production wells with the oil services firms accepting payment in crude from the wells they restart. But no firm agreements have been reached yet, a ministry official said.


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