Lyondell-Citgo refinery near capacity, 265,000 bpd

www.forbes.com Reuters, 01.30.03, 4:58 PM ET

NEW YORK, Jan 30 (Reuters) - Output at the Lyondell-Citgo refinery in Houston was at 265,000 barrels per day (bpd), or near capacity, according to officials at Lyondell Chemical Co. (nyse: LYO - news - people).

"Operating rates have recently been increased to 265,000 barrels per day, which is essentially full capacity," said Douglas Pike, Lyondell's director of investor services, in a conference call on Thursday.

From Dec. 27 until about mid-January, run rates at the 270,000 bpd plant, were reduced to approximately 130,000 bpd due to the disruption of crude oil supplies caused by a general strike in Venezuela.

Prior to the strike, Lyondell-Citgo received about 230,000 bpd of oil from Venezuela, the world's fifth largest exporter.

The company told an earnings conference call with analysts that the Lyondell-Citgo Refining LP refinery, maintained near capacity operating rates through Dec. 27 using inventories, shipments already in transit from Venezuela and spot purchases.

In mid-January supplies of crude oil from Venezuela and crude oil purchased on the spot market allowed the refinery to begin to ramp up output. In a Jan. 21 statement the company had said runs were between 220,000 and 230,000 bpd.

The company said in its fourth-quarter earnings release on Thursday that it is confident that it has established both Venezuelan and spot-market supplies to enable the refinery to operate "at high rates until the situation is resolved."

Now in the 60th day of the stoppage, Venezuela's striking oil workers have estimated oil production returning to 1.0 million bpd while the embattled government has estimated output at 1.4 million bpd.

Lyondell said that since the strike began, only 15 ships had set out from Venezuela to the refinery in Houston. Normally the refinery would have received 28 to 30 ships with 500,000 barrels capacity during this period, according to the company.

Analysts were told there is no significant maintenance work planned for the near term. There was some minor work done on the refinery when the facility was running at reduced rates. Total crude oil consumption for the fourth quarter 2002 averaged 250,000 bpd, the firm said.

Lyondell-Citgo is a joint venture between Lyondell and Citgo Petroleum Co., which is an indirect, wholly-owned subsidiary of Petroleos de Venezuela SA, the state oil company of Venezuela. (Reporting by Robert Gibbons, edited by Gary Crosse; Reuters Messaging: robert.gibbons.reuters.com@reuters.net; +1 646 223 6059; email: robert.gibbons@reuters.com)