PdV crude exports hit by pump station fire

A fire on a key pumping station will slash Venezuela´s crude exports by up to a third, compounding the blow of US oil sanctions, state-owned PdV, oil ministry and oil union officials tell Argus.

The fire that broke out on 18 February destroyed PdV's Ero flow and pumping station, effectively knocking out up to 300,000 b/d of 16°API Merey, Venezuela´s main export grade.

According to PdV, the fire struck at km 50 of trunkline 36 in the stretch running westward from Morichal to San Tomé, in the Carabobo sector on the eastern end of the Orinoco extra-heavy oil belt.

The oil belt accounts for around two thirds of Venezuela´s crude production, which had been running around 1mn b/d by recent internal PdV estimates. The Carabobo sector is the most prolific of the three active sectors of the oil belt, accounting for roughly half of total production there.

The Ero station could be down "for months" while the ruined equipment is replaced, an oil union official said. The official blamed the fire on deteriorated equipment and growing quality issues with the heavy crude and the naphtha used to transport it to Jose.

A PdV official said a pump failure at the station was aggravated by a lack of spare parts, and the resulting fire was fueled by wood chips that had been scattered around the station last week to mop up an oil spill.

The damage is "very serious," a Venezuelan oil ministry official said privately.

PdV has a number of joint ventures in the Carabobo sector, mainly Sinovensa with China´s state-owned CNPC and PetroMonagas with Russia´s state-controlled Rosneft. Smaller ventures include PetroCarabobo with partners Repsol and an Indian consortium; PetroVictoria with Rosneft; PetroIndependencia with main partner Chevron; and PetroDelta with a local partner.

It was not immediately clear which projects were directly affected.

Oil minister and PdV chief executive Manuel Quevedo blamed "right-wing saboteurs" for the blaze, a common attribution from senior government officials when faced with equipment problems.

In a statement today, Quevedo praised the professionalism of PdV's emergency response teams in suppressing the fire, but did not indicate when the station would be back in service.

PdV officially also declined to give details of the impact of the station's shutdown on its export operations and production from the Carabobo sector.

The company is already reeling from US oil sanctions imposed on 28 January. The sanctions effectively cut off some 500,000 b/d of Venezuela´s crude exports to the US market, and sever US exports of products such as gasoline and naphtha to Venezuela.