Due to a fire last week, Venezuela’s crude oil production is still down with the fire damages forcing several oil fields to shut.
A series of wildfires has hit storage tanks and pumping stations in the country’s Orinoco oil belt in the past few weeks. The belt is the home to the world’s biggest deposits of heavy crude, and output slumped by almost 100,000 bpd over three weeks to 307,000 bpd on Saturday.
The most recent accident involved a fire in the Morichal operating center which collects crude from several wells in the Orinoco belt. According to sources, the facility could not pump oil to its next destination due to the fire, forcing a storage tank to overflow at the weekend.
State oil company PDVSA is forced to stop output from projects supplying the Morichal complex. The projects include the Sinovensa joint venture with China’s CNPC, the Petrocarabobo joint venture with Spain’s Repsol, and the Petroindependencia joint venture with Chevron Corp.
The output from Venezuela’s western region slumped to 216,000 barrels on Saturday, but up from 181,000 barrels on Friday. The numbers are comparable with April 11’s output of 225,000 barrels.
The country’s eastern region posted a relatively steady output. On April 11 it produced 157,000 barrels, while Saturday the output was 154,600 barrels but still down from 162,700 barrels on Friday.
So far in 2020, Venezuela’s production has slumped by 20% amid US sanctions on PDVSA and its main buyers. Domestic inventories soared even more as exports declined in March to the lowest level in seven months.
However, the mounting inventories were able to be eased in April due to the combination of lower crude production and higher exports. According to market intelligence Kpler, Venezuela’s crude storage was at 35.8 million barrels at the end of April, down by around 2 million barrels from March.
