(Reuters, 2.Nov.2023) — Venezuela’s oil exports declined in October to less than 700,000 barrels per day (bpd) amid operational hiccups at the country’s main production region, in a sign any sustained output recovery after the lifting of U.S. oil sanctions might take time.
The U.S. Treasury Department last month broadly eased sanctions on Venezuela’s oil and gold sectors, allowing the OPEC country to export crude, fuel and gas to its chosen markets for six months, a move to encourage a fair presidential election.
But Venezuela’s supreme court this week suspended the results of a primary election to pick an opposition presidential candidate, triggering a warning by Washington it could reimpose sanctions if the Venezuelan government does not allow candidates to freely participate.
Venezuela’s state oil company PDVSA and its joint ventures exported an average 666,290 bpd of crude and fuel last month, 19% below the 821,500 bpd shipped in September, according to internal company documents and tanker tracking data.
China was once again the main destination for its oil exports, followed by the United States, which received some 178,290 bpd taken by the no. 2 U.S. oil producer Chevron (CVX.N) under an individual U.S. license.
LACK OF POWER, DILUENTS
Venezuela’s exports of oil byproducts and petrochemicals also fell, to 228,500 metric tons from 324,000 tons in the previous month. Its political ally Cuba received some 32,000 bpd of crude and fuel, according to the data.
The export decline mainly was caused by a lack of diluents used to produce exportable crude grades and by power interruptions that forced the shutdown of a crude upgrader, PDVSA documents showed.
Venezuela’s crude production declined to 762,000 bpd in September from 820,000 bpd the previous month, according to figures reported to OPEC. Average daily production so far this year of some 780,000 bpd remains below the year’s target of 1 million bpd.
Right after the U.S. sanctions easing, PDVSA began calling its traditional customers to re-establish trading relationships, mainly through spot sales. But the company’s demand for pre-payment of all cargo sales, a lack of open-market tenders, and oil quality issues have raised obstacles for a prompt return by cash-paying customers.
An internal audit earlier this year that uncovered missing payments and led to the arrest of dozens of officials and businessmen also has made it difficult for PDVSA to reorganize its trading business, according to people familiar with the matter.
Reporting by Marianna Parraga in Houston and Mircely Guanipa in Maracay, Venezuela, editing by David Evans