Venezuela's PDVSA to Keep Producing, Exporting Oil Previously Handled by Chevron

SEATTLE (Oil Monster):  Venezuela's state-run PDVSA has put together three operational scenarios as part of a plan to continue producing and exporting oil at its largest joint venture with Chevron once a license for the U.S. major to operate in the country expires next month, according to a company document seen by Reuters on Monday.

The administration of U.S. President Donald Trump this month gave Chevron 30 days through early April to wind down all oil operations and exports from Venezuela that are currently going to the United States under a license granted in 2022.

Chevron has a presence in the U.S.-sanctioned South American country through joint ventures where PDVSA is the largest shareholder, with the Petropiar project at the vast Orinoco Belt being the most important partnership.

The Venezuelan firm plans to produce between 105,000 and 138,000 barrels per day (bpd) of Hamaca heavy crude at Petropiar once the Chevron license expires, in line with production levels in recent months, the document says.

A portion of the crude output that varies depending on the scenario will be sent to domestic refineries along with some byproducts like vacuum gasoil, while another portion will be exported to markets other than the U.S.

The vacuum gasoil allows PDVSA to produce low-octane gasoline for domestic distribution.

PDVSA's main goal with the changes is to maintain Petropiar's output levels and avoid the need to halt the upgrader or shut any of the joint ventures' oilfields, a source close to the company's operations said.

PDVSA and Chevron did not immediately reply to requests for comment.

In order to deal with possible shortages of diluents needed to sustain Petropiar's operations, PDVSA will recycle a larger portion of imported naphtha while supplying other diluents from its largest refining complex, Paraguana, to the project.

A dynamic movement of tankers that is currently allowing Chevron to move Venezuelan crude between domestic ports before exporting would be minimized, according to the document.

Some units of Petropiar's crude upgrader are expected to be taken out of service to produce feedstocks other than crude oil in an arrangement similar to the one PDVSA put in place in 2020 when the Chevron license was restricted by Trump's first administration.

Courtesy: www.reuters.com