Venezuela Crude Production At 2.02 Mln B/d - PDVSA President

sg.biz.yahoo.com Monday February 24, 8:30 PM (This article was originally published Sunday)

CARACAS (Dow Jones)--Crude production at Venezuela's state-owned oil monopoly Petroleos de Venezuela SA (E.PVZ) currently stands at 2.02 million barrels per day, the company president said Sunday.

"We are now at the production level of 2.02 million barrels and by the end of next week it will be 2.5 million barrels per day," Ali Rodriguez said. However, fired staff of PdVSA claim production is much lower and stands at around 1.4 million b/d while exports stand at 1 million b/d. Rodriguez didn't give any new export numbers.

Some 35,000 oil workers at PdVSA joined a nationwide strike Dec. 2 last year that was aimed at the resignation of President Hugo Chavez. The strike severely crippled exports and production which stood at a level of around 3 million b/d by the end of November.

Chavez, discussing production levels at his televised Sunday show "Hello President" said he expects the Organization of Petroleum Exporting Countries, or OPEC, not to have any problems that Venezuela would "progressively put crude stocks on the market that haven't been used," he said, without elaborating further.

He added that OPEC's Secretary-general Alvaro Silva is already working on the case. Silva is Venezuela's former Oil Minister and was appointed Secretary-general after Rodriguez became PdVSA President. Last year, Venezuela exceeded its official output target of 2.5 million b/d by around 400,000 b/d when it drew from crude inventories that are located in the Caribbean. Venezuela's OPEC quota - at least on paper - is 2.819 million b/d.

Venezuela's request comes as the company struggles to go beyond the 2 million b/d production level. After focusing on easy oil fields that don't require much added pressure to get the oil flowing, PdVSA faces difficulties as mature oil fields are more labor and capital intensive and take more time to pump oil. Experts have said they doubt PdVSA would reach 2.5 million b/d any time soon due to a lack of financial and human resources.

However, Sunday, a local newspaper reported PdVSA plans to lift the force majeure on its operations in the coming days as the situation at the company is almost back to normal.

"I believe we are in the condition to lift the force majeure...we will lift it in a matter of days or hours," Luis Marin was quoted as saying. Marin is in charge of company operations in eastern Venezuela. He could not be reached for additional comment.

A declaration of force majeure three days after the nationwide strike started Dec. 2 temporarily released the company and its clients from contractual obligations.

Meanwhile, the company has been split in half, with two operating entities in the eastern and western part of the country. Company headquarters will remain in Caracas, albeit slimmed down in a dramatic fashion.

El Universal reported Sunday that the number of dismissals at PdVSA was increased by 1,785 to a total of 14,548, or over 30% of its work force. The new firings were in the western part where Lake Maracaibo is located.

Also, El Universal reported that Chavez will head the so-called National Oil Council, or CNP, that will define the short, medium and long term strategy of the oil behemoth. The Planning, Finance, Trade and Oil Ministry will make up the rest of the Oil Council.

-By Fred Pals, Dow Jones Newswires; 58414-2887461; fred.pals@dowjones.com