Venezuela checks oil production decline for now

PdV has managed to stem a precipitous slide in its crude output, but the country's oil sector remains beset by problems

Venezuelan PdV has checked a decline in its crude production, mainly thanks to repairs to two extra-heavy crude upgraders.

Output is holding at around 1.15mn b/d following the repairs to the upgraders operated by its joint ventures with foreign partners, according to PdV officials, Argus estimates and internal company data. The repairs and maintenance to the upgraders associated with the PetroMonagas and PetroPiar ventures, both led by PdV with majority stakes, featured the replacement of pumps, valves and refractory tiles, as well as furnace cleaning, a Venezuelan oil ministry official says. The upgraders take 8-10°API extra-heavy Orinoco crude diluted with imported naphtha and convert it into lighter synthetic grades for export.

Russian Rosneft holds a 40pc stake in PetroMonagas, while Chevron holds 30pc in PetroPiar. The upgraders, part of a set of four built at the Jose terminal in Anzoategui state in the 1990s, were nationalised in 2007 when Hugo Chavez was president. A third upgrader, PetroCedeno, in which Total and Norway's Equinor hold minority stakes, is operating, but Petro San Felix, the only upgrader wholly owned by PdV, is off line. The four upgraders have synthetic crude production capacity of more than 600,000 b/d.

In a separate indication of upstream activity, service firm Baker Hughes reports that Venezuela's rig count increased by two to 27 in December from November. But the December count is still well shy of the 48 tally reported by Baker Hughes in January last year.

Venezuelan crude production has plunged by around 900,000 b/d over the past two years, driven by declines in PdV's mature eastern and western divisions and the Orinoco oil belt, which has long been touted as the anchor of future growth. A lack of investment, equipment breakdowns and theft, power cuts and an exodus of skilled industry personnel from the country have undercut efforts to revive production, which peaked at more than 3mn b/d in the 1990s.

Venezuelan crude production