Oil output bounces
back at Venezuela-China crude joint venture, by Luc Cohen, 12/13/18, Reuters.
CARACAS (Reuters) - A Venezuelan
oil joint venture with a state-owned Chinese company accounting for around 10
percent of the crisis-stricken OPEC member country’s output has nearly doubled
production in the past seven months, a unit of
state-owned PDVSA said on Thursday.
Rising production of heavy crude at Sinovensa, owned by PDVSA subsidiary
Venezuelan Petroleum Corporation (CVP) and China National Petroleum Corporation
(CNPC), could slow a freefall in Venezuela’s output which has seen production
drop to the lowest levels in nearly 70 years.
Sinovensa,
which is located in the Orinoco oil belt in southern Venezuela and is the
second-largest part foreign-owned oil operation, now produces some 130,000
barrels per day (bpd), CVP said in a Facebook post. An Aug. 10 post said output
was 101,181 at the end of July and just 69,400 bpd in April.
Venezuela
sold CNPC an additional 9.9 percent stake in Sinovensa in September, leaving it
with 49 percent ownership. PDVSA owns the rest. As of 2017, no oilfield joint
venture in Venezuela had more than 40 percent foreign ownership.
China has
lent over $50 billion to Venezuela through oil-for-loan agreements over the
past decade, securing energy supplies for its fast-growing economy. But the
financing dried up as the South American country’s economy began spiraling
downward in 2015, pressured by plummeting oil prices.
Output hit
historic lows earlier this year, when a shakeup in PDVSA’s leadership and a
sweeping corruption probe sped up a longstanding decline in Venezuela’s oil
output driven by years of underinvestment and crumbling infrastructure.
An exodus
of qualified personnel and rising crime at industry installations further
weakened output.
A
world away, sting lingers from Fed's rate hikes “They are
managing to recover so-called ‘deferred output’ which they had lost due to
issues like equipment theft,” said Antero Alvarado, Venezuela director at
consultancy Gas Energy Latin America. “But this will have a short-term impact
because output will fall again and they will need to drill more wells.”
Venezuela
told the Organization of the Petroleum Exporting Countries it produced 1.46
million bpd in November, up from 1.43 million in October but down from more
than 2 million in 2017. Data from secondary sources showed a decline to 1.1
million bpd in November, according to the OPEC report, published Wednesday.
Sinovensa
produced an average of 128,700 bpd in 2017, second only to the 146,000 produced
by Petropiar, 30 percent owned by Chevron (CVX.N), according to the U.S. Energy Information Administration. The
CVP Facebook post cited CNPC executive Jia Yong saying he expected output to
reach 165,000 bpd.
Norb Leahy, Dunwoody
GA Tea Party Leader
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