CARACAS (Reuters) – Crude output in Venezuela’s key Orinoco oil belt plunged by a quarter to less than 300,000 barrels per day (bpd) in August due to a shortage of diluents needed to blend with the region’s extra-heavy crude, documents seen by Reuters showed.
The drop comes as state oil company PDVSA directs more medium and light crudes to refining to boost supplies of scarce motor fuel in the crisis-stricken OPEC nation, leaving little to dilute the Orinoco’s tar-like crude into exportable grades.
Diluent shortages could threaten the relative stability in the South American country’s oil output and exports in 2021, after years of underinvestment followed by U.S. sanctions sent crude production – the lifeblood of Venezuela’s economy – plummeting to multi-decade lows last year.
The Orinoco belt produced some 288,000 barrels on Aug. 26 and 298,000 barrels on Aug. 31, down from 400,000 barrels on Aug. 8, according to PDVSA production reports seen by Reuters. Venezuela’s total output averaged 614,000 bpd in July, according to figures the country provided to OPEC.
The Aug. 31 and Aug. 26 reports said low diluent inventories were a cause of reduced output at three of the belt’s biggest projects: PDVSA’s Sinovensa, Petromonagas and Petropiar joint ventures with China National Petroleum Corp, Russia’s Roszarubezhneft and Chevron Corp, respectively.
PDVSA, which holds majority stakes in all three joint ventures, did not immediately respond to a request for comment.
Another PDVSA document seen by Reuters said the Jose terminal, Venezuela’s main oil blending and export hub, was on “maximum alert” due to the diluent shortage.
PDVSA last month imported a rare 620,000-barrel cargo of condensate, a diluent, and has also sought to use synthetic crudes as refinery feedstock to free up light and medium crudes for the Orinoco belt. U.S. sanctions complicate the company’s ability to import diluents.
(Reporting by Luc Cohen in New York, Deisy Buitrago in Caracas and Marianna Parraga in Mexico City; Editing by Matthew Lewis)
