Venezuela PDVSA may close three of four refineries – union leader

29 March 2018 23:31 Source:ICIS News

MEDELLIN, Colombia (ICIS)--State-controlled Petroleos de Venezuela (PDVSA) may be forced to shut three of its four domestic refineries amid a lack of crude oil feedstock and staff shortages, a union leader said on Thursday.

The refineries under threat are the 310,000 bbl/day Cardon, the 187,000 bbl/day Puerto la Cruz and the 146,000 bbl/day El Palito, according to Ivan Freites, head of an oil union representing PDVSA workers. The three facilities account for roughly half of the nation’s domestic refining capacity.

A spokesperson for PDVSA declined to comment.

The 645,000 bbl/day Amuay refinery, which along with Cardon forms the 955,000 bbl/day Paraguana Refining Centre, is also in danger of indefinite closure due to equipment failures that have paralysed several processing units, Freites said.

Freites’ comments were made in an article reposted on the union leader’s official Twitter account.

Low oil prices and an economy in crisis have left PDVSA desperately short of funds to invest in exploration and production, reducing the availability of crude feedstock for its refineries. Detractors of the state-run industry also accuse the government of mismanagement and insufficient transparency.

Venezuela’s refining circuit is currently processing about 390,000 bbl/day, or 30% of its installed capacity, Freites said.

According to the union leader, PDVSA is considering the closures after negotiations to lease the Amuay and Cardon refineries to state energy firms PetroChina and Russia’s Rosneft ended in failure.

Under the proposed lease agreement, PetroChina and Rosneft would have been required to cover 100% of the estimated $10bn in repair and modernisation costs of both facilities.

By Simon West