Venezuela Shuts In Some Crude Output, Storage Bottleneck

sg.biz.yahoo.com Saturday March 1, 12:28 AM

CARACAS -(Dow Jones)- Venezuela's state-owned oil monopoly Petroleos de Venezuela SA has shut in about 500,000 barrels per day of crude production as storage tanks have filled and exports from the Jose port in eastern Venezuela had to be slowed down, a PdVSA manager said Friday.

But output could get back to previous levels the moment the bottleneck of stored tanks is resolved, the PdVSA manager, who is based in eastern Venezuela, said. He spoke on the condition of anonymity. "This is just temporary, nothing to be worried about," the manager added.

ADVERTISEMENT It could take three to four days to empty storage facilities and get production back at previous levels, the manager added. Total production nationwide still stands at around 1.5 million b/d, the manager said.

The drop coincides with the latest report of ex-PdVSA staff early Friday that production dropped by about the same amount to 1.13 million b/d from 1.58 million b/d a day earlier. The government maintained Thursday production levels stood at 2.08 million b/d.

The company was hit by a strike that lasted two months and severely affected oil production and exports. The government has fired more than 15,000 employees that participated in the strike.

Earlier this week, the company lifted the force majeure in the eastern region after major shipping agencies and oil companies certified loading conditions at the port.

The company is struggling to reach or go beyond the 2 million b/d production level, analysts have said. 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.

By Fred Pals, Dow Jones Newswires; 58212-5641339; fred.pals@dowjones.com;