Diluent Shortage Drills Venezuela Output

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Crude output in Venezuela's key Orinoco oil belt plunged to less than 300,000 b/d 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 Petroleos de Venezuela (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 (OD Aug.3'21). 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 US sanctions sent crude production -- the lifeblood of Venezuela's economy -- plummeting to multidecade lows last year (OD Jan.8'21). The Orinoco belt produced some 288,000 bbl on Aug. 26 and 298,000 bbl on Aug. 31, down from 400,000 bbl on Aug. 8, according to PDVSA production reports seen by Reuters. Venezuela's total output averaged 614,000 b/d 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, 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. (Reuters)

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