Caracas, 4 June (Argus) — Crude oil production from Venezuelan state-run PdV's strategic El Furrial oil producing area in Monagas state declined about 12pc over 10 months from 910,000 b/d in August 2012 to about 800,000 b/d in April 2013, according to an internal PdV report reviewed by Argus.
Crude flows from El Furrial, located in the Santa Barbara-Pirital formation that holds over 7bn bl of medium and light crude oil, accounted for about 30pc of PdV's officially reported total crude output of 2.98mn b/d last year. Argus estimates that PdV's real crude production is about 2.33mn b/d.
Energy minister and PdV president Rafael Ramirez said 27 May that PdV is working on solving “some complex problems” in Monagas, but he gave no specifics.
Executives with oil services firms in Monagas tell Argus that PdV appears to be struggling to operate the complex Furrial and related Pigap II gas and water compression/injection systems that late President Hugo Chavez nationalized in May 2009 during a dispute over PdV's unpaid debts to oil services companies.
"If the gas compression and re-injection systems have not been properly maintained the pipelines can become clogged, affecting gas pressure levels in the reservoirs that will lower crude production volumes per well," an oil services executive in Monagas said.
PdV and the energy ministry declined to comment on the specific nature of the upstream problems that Ramirez acknowledged on 27 May.
Pigap II is a high-pressure gas compression and injection system consisting of 20 gas-injection wells and eight gas-pressurizing trains designed to re-inject gas at pressures of 9,000 pounds per square inch with the aim of recovering up to 32pc of the oil in El Furrial.
Falling production at El Furrial has potential financial implications for PdV's capital spending plans and for the central government's revenues from oil taxes and royalties as the economy falters.
PdV generates 96pc of Venezuela's hard currency revenues.
The central bank reported a 12.5pc drop in oil revenues during first-quarter 2013 compared with fourth-quarter 2012, partly due to a 7.2pc decrease in the value of the Venezuela's crude basket, to $103.70/bl from $111.99/bl, but also because of a 5.6pc drop in the volume of oil exports.
Weaker oil activity resulting from PdV's upstream problems since last August was reflected in a very abrupt economic slowdown during the first three months of 2013.
The bank reported on 31 May that Venezuela's GDP grew only 0.7pc in first-quarter 2013 compared with over 5pc GDP growth for full-year 2012.
PdV's 2013 business plan calls for boosting crude oil production to a new official level of 3.45mn b/d in early 2014.
But energy ministry officials hinted today that the combined crude production decline of 110,000 b/d since last August at El Furrial as well as from Zulia state's ageing Maracaibo-Falcon basin could force PdV to reduce its projected upstream capacity expansion goals for 2013 and focus more spending on tackling El Furrial's operational problems.
PdV's oil production from the Maracaibo-Falcon basin declined from 810,000 b/d August 2012 to 790,000 b/d in April 2013. The basin's oil fields have been producing since the 1940s.
Energy ministry data indicates that El Furrial currently is producing about 200,000 b/d or 20pc below its peak 1mn b/d capacity immediately before the May 2009 nationalization of the Furrial and Pigap II gas compression/injection systems that were owned and operated at the time by a joint venture of US oil services firms Williams and Exterran.
PdV, Williams and Exterran signed final compensation agreements for the nationalized Furrial and Pigap II assets in March 2012. But PdV has operated the systems by itself since their 2009 nationalization.
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