VENEZUELA DATA: July crude production nears 1 million b/d

Venezuela's oil production by state-owned PDVSA and its foreign partners rose to 993,000 b/d in July, 85,000 b/d over June, according to the estimated data included in the PDVSA production report reviewed by S&P Global Commodity Insights.

The increase was due to a rebound in production in the Orinoco Belt, as well as in the fields located in western Venezuela, according to the report.

Extra-heavy crude production in the Orinoco Belt, Venezuela's largest operating field, rose to 595,000 b/d in July, 60,000 b/d over June, according to the report. PDVSA and foreign partners participate in the four main blocks in which the Orinoco Belt oil basin is divided: Carabobo, Ayacucho, Junín and Boyaca.

According to the report, average crude output in July in the Carabobo block was 270,000 b/d; in Ayacucho 165,000 b/d; in Junín 150,000 b/d, and in Boyaca 11,000 b/d.

In the Carabobo Block, the joint ventures with the highest production in July were Petromonagas (PDVSA 60% Russia 40%) with 75,000 b/d and Sinovensa (PDVSA 60% CNPC 40%) with 65,000 b/d. In the Ayacucho block, the Petropiar joint venture (PDVSA 70% Chevron 30%) recorded an average production of 95,000 b/d. In the Junión block, the joint venture Petro San Felix (now Petrolera Roraima) recorded an average production of 35,000 b/d.

The report added that the upgraders Petrocedeño, Petro San Felix and Petromonagas, located in the north of Anzoategui state, remained halted without a restart date. The only upgrader in service is Petropiar, whose major maintenance is two years behind schedule, according to the report.

Other fields

Output in western Venezuelan fields rose to 238,000 b/d in June, 26,000 b/d over June. Of the total production in the west, 38%, or 90,000 b/d, came from the Boscan field, operated by a joint venture between PDVSA (60%) and Chevron (40%). Details on production in all fields were not available in the report.

Output from the fields in Monagas state, in the east of Venezuela, fell to 160,000 b/d in July, 1,000 b/d lower than in June.

Monagas state produces the Mesa and Santa Barbara light crudes that PDVSA uses in its refining system and also to dilute extra-heavy crudes from the Orinoco Belt.

The report did not contain information on offshore condensate production and production of the subsidiary PDVSA Gas.

The PDVSA production report contains preliminary, unofficial information that can change after consolidation.

Venezuela expects to increase its oil production to 1.235 million b/d in December, PDVSA president Rafael Tellechea said previously.

Venezuelan crude exports drop 342,000 b/d

While output climbed in July, exports dropped 342,000 b/d to 415,000 b/d in July, according to S&P Global Commodities at Sea.

"Venezuela also allocated 95,000 b/d for domestic ports, including 61,000 b/d earmarked for anchorage zones, the most since November," said CAS analysts Mark Esposito and Izzaty Kamal in a report.

Of that 415,000 b/d, 215,000 b/d went to the US.

"In recent months, Spain emerged as a primary market for Venezuelan crude following authorization from the US Treasury Department allowing Repsol to enhance its JV production endeavors with PDVSA. Shipments to Spain jumped to 113,000 b/d in May and 115,000 b/d in June after averaging 12,900 b/d during Q1 2024," the analysts said. "However, exports fell to 29,000 b/d in July, a four-month low."

While no Venezuelan crude was exported to China in July, "126,000 b/d loaded for Malaysia, and may ultimately land in Chinese ports. Venezuela shipped 196,000 b/d directly to China during H1 2024," the analysts said.

Protests have grown in Venezuela following the disputed July 28 presidential election.

While the protests have yet to impact crude production or refinery operations, they have led to widespread gasoline shortages as trucks have been unable to deliver to service stations, according to sources.

Venezuela regularly imports gasoline and blending components as its refineries are operating well below capacity.

Oil field and refinery operations have not been affected by the election or protests. However, PDVSA suspended work at its administrative offices throughout the country from July 27 to August 1, according to internal memos.

"We remain on standby, it is early to draw conclusions," a representative of an international oil company operating in Venezuela said on condition of anonymity.

Venezuela's National Electoral Council (CNE) declared current president Nicolas Maduro the winner with 51.2% of 80% of the votes counted. However, Venezuela's opposition party claimed July 29 that Edmundo González has won the July 28 election with 69.5% of votes, and with 73.2% of the ballots counted.

The future of Venezuela's energy industry is at stake, as the country has proven oil reserves of 303 billion barrels and 200 Tcf of natural gas.

If González becomes president, the US will likely ease sanctions on Venezuela, allowing crude output to recover over time.