PdV Orinoco ops recovering, China tax looms

Venezuelan state-owned PdV's Sinovensa and PetroPiar joint ventures resumed operations yesterday after a ruptured natural gas line was repaired, but a looming Chinese tax threatens to slow operations again next month.

Sinovensa, PdV's Orinoco crude blending joint venture with Chinese state-owned CNPC, is currently producing about 45,000 b/d of 16°API Merey blend and should reach 75,000 b/d by week's end, a PdV official at the facility tells Argus.

PdV's PetroPiar Orinoco upgrading joint venture with partner Chevron is producing about 70,000 b/d of synthetic Special Hamaca Blend and aims to reach about 100,000 b/d by early June, a PdV manager at the upgrader said.

Plans to load 1mn bl of SHB on 28-30 May have been reprogrammed for the first week of June.

PdV is using storage tanks at PetroPiar and two other upgraders that are out of service — PetroMonagas and Petro San Felix — to support production and logistics.

The PetroPiar upgrader halted production when the gas line broke on 17 May. It continued running in recirculation mode during repairs.

A Jose terminal supervisor tells Argus the resumption of blending at Sinovensa and upgrading at PetroPiar will accelerate loadings and reduce a tanker backlog.

Among the Asia-bound VLCC and Suezmax tankers waiting to load or that have partially loaded at Jose are Maya, Xing Yei, Beyong and Eagle 1, according to PdV's latest terminal roster.

But PdV seems unlikely to meet its ambitious 600,000 b/d export target for May because of faulty loading equipment and a shortage of diluent needed to transport and process extra-heavy Orinoco crude.

More pressing is a new $30/bl Chinese tax on diluted bitumen, the category under which Venezuelan crude is imported into China, the Opec country's main market. The tax takes effect on 12 June.

China emerged as the top destination for Venezuelan barrels after the US imposed oil sanctions on Caracas in January 2019.