(Repeats with no changes)
* Blending halted at Petropiar, slowed at Petrosinovensa
* Tia Juana, Lagunillas, Bachaquero, Boscan reducing output
* Venezuela’s crude inventories at highest since January 2018
By Marianna Parraga and Mircely Guanipa
MEXICO CITY/PUNTO FIJO, Venezuela, Sept 18 (Reuters) – V enezuela’s state-run oil company PDVSA has suspended some crude blending and cut back production as inventories have swelled due to U.S. sanctions scaring off buyers and shippers, according to internal documents, sources and data.
Washington this year imposed several rounds of sanctions on PDVSA in an attempt to oust socialist President Nicolas Maduro, whose 2018 re-election was dismissed by the opposition and most Western democracies as a sham.
The measures banned U.S. firms from buying PDVSA’s oil, depriving Venezuela of its former top destination for exports, and scaring off other customers as U.S. officials also threatened foreign firms with punishment if they “materially assist” Maduro’s administration.
The OPEC nation’s crude inventories as a result have risen sharply since late August to more than 38 million barrels, highest since early 2018, according to data intelligence firm Kpler. Venezuela’s crude storage capacity is about 65 million barrels, but some tanks are inactive due to lack of maintenance.
“Storage is almost at top capacity. We are just days ahead of being forced to shut production at some eastern oilfields,” a PDVSA executive said.
PDVSA’s portfolio of clients has shrunk, with Russia’s Rosneft now taking about two thirds of Venezuelan oil exports for reselling to Asia.
The sanctions have also reduced the number of tanker operators willing to load in Venezuela, and left PDVSA with minimum access to hard currency to pay contractors and service providers, which has affected output, according to sources and company documents detailing the state company’s struggles.
As of August, Venezuela’s crude production is down 60% from January to 979,400 barrels per day (bpd), according to unofficial PDVSA figures seen by Reuters. Venezuela’s oil exports were 770,000 bpd last month and active rigs fell to 25, compared with 48 drilling units two years ago.
The Petropiar crude blending facility near the Jose terminal, operated by PDVSA and U.S.-based Chevron Corp, suspended operations last week. Production has not yet been halted at the project’s associated oilfield in the Orinoco belt as of Sep. 17, according to one of the documents and sources.
Chevron referred questions on its joint projects in Venezuela to PDVSA. The state-run firm did not reply to a request for comment.
The extra-heavy oil extracted from the Orinoco belt needs to be mixed with lighter crudes to create exportable grades like Venezuela’s flagship Merey heavy crude.
With Petropiar’s blending operations halted, Merey production has been slowed. The neighboring Petrosinovensa project, operated by PDVSA and state-run China National Petroleum Corp (CNPC), reduced output by 20,000 bpd last week, according to the same PDVSA document.
“Petropiar is out of service due to high inventories of Merey. Petrosinovensa’s plant one is in service, output adjusted to 72,000 bpd. Plant two is re-circulating crude,” it said.
Of the country’s total stocks, 19.6 million barrels were at the country’s largest oil port – the Jose terminal on its eastern coast – waiting for vessels and customers as of Sep. 17, according to Kpler.
PDVSA recently switched its focus to Merey, helping it find new customers in Asia amid sanctions. But it has also caused a faster build-up of stocks in the country’s east, especially since CNPC and its units stopped loading Venezuelan oil in August, according to the sources and data.
WESTERN PRODUCTION DECLINES
Off the country’s western coast, a handful of vessels have been acting as floating storage for months, according to Refinitiv Eikon data.
“We currently have three tankers full of crude waiting for vessels that would load through ship-to-ship operations. But the vessels have not arrived,” said an inspector from one of PDVSA’s western ports.
Production had already slowed in Venezuela’s western fields, but the difficulty in finding vessels for exports added to inventories, forcing PDVSA and its joint ventures to further curtail or suspend output at oilfields including Tia Juana, Lagunillas, Bachaquero and Boscan, according to sources from those projects. (Reporting by Marianna Parraga in Mexico City and Mircely Guanipa in Punto Fijo, Venezuela; Additional reporting by Luc Cohen in Caracas; Editing by David Gaffen and Tom Hogue)
This post was originally posted on Reuters: Company News – View Original Article