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Venezuela's Orinoco Belt crude production falls to 246,000 b/d: technical report

Caracas, Venezuela — Venezuela's Orinoco Belt production dropped to 246,000 b/d on Tuesday, or 18.9% of its maximum capacity of 1.3 million b/d, from 370,000 b/d on September 18, according to a technical report seen by S&P Global Platts.

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The production levels by Venezuelan state-owned PDVSA and its international partners in the Orinoco Belt has continued to drop due to a lack of tankers for exporting crude oil and a surplus of crude inventories at the marine oil terminals.

The decline impacts all businesses between PDVSA and its foreign partners in the four main blocks into which the Orinoco Belt is divided -- Carabobo, Ayacucho, Junin and Boyaca.

In these blocks, PDVSA has formed seven joint ventures -- Petrodelta, Petrooritupano, Petrolera IndoVenezolana, Petrolera Sinovensa, Petrocedeno, Petropiar and Petromonagas. Eight additional ventures are in development -- Petroindependencia, Petrocarabobo, Petrojunin, Petromacareo, Petrourica, Petromiranda, Boyaca 8 and Junin 10.

According to the technical report updated on Tuesday, production in the Carabobo block was 106,000 b/d, in the Ayacucho block 120,000 b/d, in the Junin block 7,000 b/d and in the Boyaca block, 13,000 b/d.

PDVSA could not be reached immediately for comment.

The inventories on land and floating storage are full because PDVSA's customers -- new and traditional -- have canceled cargoes on schedule in August and September because they cannot find tankers to cover the routes to and from Venezuelan ports amid the US sanctions, according to previous reports.

The Orinoco Belt, the main oil production area in Venezuela, is a huge reserve of extra heavy crudes that are acidic and with high heavy metal content. It is estimated to contain 220 billion barrels of crude over 55,314 square kilometers in the southern states of Guarico, Anzoategui and Monagas.

Venezuelan crude production and exports have been impacted by frequent blackouts caused by deterioration and lack of investment in the country's power grid, which is fully controlled by the state. Output has also been impacted by difficulties in importing diluents for extra-heavy crude, and the low availability of tankers due to the US sanctions, according to previous PDVSA reports.

PDVSA has continued to sell oil and buy products on the global market, but is facing severe challenges due to the US sanctions. The US administration of President Donald Trump unveiled sanctions on PDVSA on January 28.

PDVSA indefinitely halted the production of upgraded Orinoco Belt synthetic crudes in August, and instead converted its upgraders to blending facilities for the production of Merey 16 crude.

Platts reported on Monday, as per a previous technical report, that Venezuela's production of Merey 16 crude by PDVSA and its foreign partners fell to 164,000 b/d in September, or a decline of 54.2% from the 358,000 b/d averaged in August.

-- Newsdesk-Venezuela, newsdesk@spglobal.com

-- Edited by Manish Parashar, newsdesk@spglobal.com