File photo of the PDVSA logo on an oil storage tank at its El Palito refinery in Puerto Cabello.
Mar 2, 2016. . / Marco Bello

By Marianna Parraga

Sep 15 (.) – Venezuela’s state-owned PDVSA is implementing measures to recover a portion of the oil production lost in recent months by increasing the mix of crude in the Orinoco Belt, its most important extraction area, according to sources. and a company document.

The sanctions imposed by the United States since 2019 have deprived PDVSA [PDVSA.UL] of the imported diluents you need to produce higher-value crudes. The measures have shrunk its customer and supplier base, collapsing oil exports to their lowest level since the 1940s and significantly reducing production.

PDVSA and its joint ventures produced 336,000 barrels per day (bpd) of crude at the end of August, according to internal company figures. A year ago, the country’s production was 933,000 bpd, according to figures reported to OPEC. Crude oil exports are the largest source of foreign exchange earnings for Venezuela.

Two weeks ago, PDVSA restarted mixing operations at the Petrosinovensa joint venture, which it shares with China National Petroleum Corp (CNPC), after months of paralysis. It is now processing 64,500 bpd of diluted crude oil (DCO) to produce around 77,000 bpd of exportable Merey crude, according to the document.

On Sunday, PDVSA finished offloading 500,000 barrels of Iranian condensate for another JV, Petropiar, operated alongside US-based Chevron Corp, seeking to boost blending operations there, the document also showed.

The condensate, which will be used to dilute Venezuela’s extra-heavy crude, arrived at the country’s main oil port, Jose, over the weekend in an unnamed supertanker. Tracking service identified the ship as Horse, flying the Iranian flag, through the use of satellite imagery.

PDVSA did not respond to a request for comment.

The full contents of the shipment dispatched by Iran is unknown, but PDVSA is also expected to use imported heavy naphtha as a diluent to revive production, one of the sources said.

PDVSA faces quality problems in shipping Merey crude, its most popular variety for export, to its clients in Asia and Europe, according to company documents.

The problems, which have caused delays in exports, are forcing PDVSA to replace scheduled shipments of Merey crude with other varieties such as Hamaca and Leona 24, according to the documents.

PDVSA plans to replace a portion of its Orinoco Belt crude production, currently entirely centered on Merey, with DCO, the sources said.

(Report by Marianna Párraga in Mexico City, additional report by Luc Cohen in New York. Edited in Spanish by Javier Leira)