RPT-UPDATE 1-Venezuela's Orinoco syncrude projects back online

www.forbes.com Reuters, 02.28.03, 3:25 PM ET

(Adds comments from ConocoPhillips in paragraphs 4-5) CARACAS, Venezuela, Feb 28 (Reuters) - Venezuela's four foreign-financed extra-heavy-oil upgrading projects in the Orinoco region are back online following the restart of the Petrozuata joint venture on Friday, project officials said. The projects, which partner state oil firm Petroleos de Venezuela PDVSA with international firms such as U.S. ExxonMobil Corp. (nyse: XOM - news - people) and French TotalFinaElf <TOTF.PA>, had been pumping over 400,000 barrels of extra heavy oil before shutting down due to an oil strike that started Dec. 2. The Cerro Negro and Sincor projects resumed output this week after PDVSA restarted natural gas supplies needed as feedstock for processing units that upgrade the ultra-heavy oil into synthetic crude for export. Petrozuata, which partners PDVSA and ConocoPhillips (nyse: COP - news - people), reestabished production on Friday. "We have started running the plant's crude processor and coker at reduced rates," a spokesman for ConocoPhillips told Reuters. He did not give initial production levels. A fourth project, Hamaca, has resumed limited output of the tar-like Orinoco oil mixed with lighter crude to create an exportable blend. Hamaca's synthetic crude upgrader has not been completed. Initial output from all four projects will increase as gas supplies improve. Venezuela's government has been battling to restore the strike-hit oil sector, which provides half of state revenue. President Hugo Chavez fired over 15,000 PDVSA workers who took part in the strike, hiring replacement workers and the military to staff abandoned posts. The OPEC nation, normally the world's No. 5 crude exporter, was pumping nearly 3.1 million bpd of oil including output from the Orinoco region before the strike. On Thursday, oil minister Rafael Ramirez said total oil production had been restored to 2.08 million bpd. But PDVSA employees and rebel oil workers said that output temporarily fell by 450,000 bpd to 500,000 bpd on Friday. The rebel workers say output is now 1.13 million bpd.