Venezuela Sincor restarting, no syncrude output yet

www.forbes.com Reuters, 02.24.03, 8:50 AM ET

CARACAS, Venezuela, Feb 24 (Reuters) - Venezuela's strike-hit, extra-heavy oil project Sincor is in the process of restarting major processing units but short-term output will be determined by natural supplies, a project official said on Monday. Sincor, which upgrades ultra-heavy oil from Venezuela's Orinoco region into refineable synthetic crude, was shut when state oil firm Petroleos de Venezuela (PDVSA) cut supplies of natural gas needed to run processing units during an oil strike started on Dec. 2 by foes of President Hugo Chavez. "We are in the process of restarting. We sent out about 2 million barrels of finished crude (from storage) over the weekend," General Manager Joris De Smett told Reuters. Last week project officials said they hoped to restore production over the weekend, after storage levels built up before the stoppage were drawn down. De Smett said start-up volumes would be determined by the amount of natural gas provided by PDVSA for the project, which partners French TotalFinaElf <TOTF.PA> and Norway's Statoil <STAT.OL> with PDVSA. Full production could be reached by the end of the week if gas supplies are sufficient, he said. Sincor has the capacity to process 200,000 barrels per day (bpd) of the Orinoco region's tar-like crude into 180,000 bpd of syncrude. The strike, which had wide support from PDVSA employees, cut Venezuela's oil production from 3.1 million bpd to under 150,000 bpd at the lowest point. The government has fired over 12,000 of the the striking employees and used replacement workers to restart the industry. PDVSA says oil production is now over 2 million bpd, while the rebel oil employees say it is closer to 1.5 million bpd. The return of all four of the Orinoco ultra-heavy projects would add about 400,000 bpd to the OPEC nation's oil output.