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Venezuela's 2021 crude output shows no growth from last year

Highlights

Average year crude production slightly below 2020

Production from JVs account for 60% of total production

Iranian condensates boost output for third straight month

Venezuelan state-owned PDVSA and its foreign joint venture partners recorded average crude oil production of 560,000 b/d in 2021, according to an internal report reviewed by S&P Global Platts.

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The average year was slightly below 2020 when production averaged 570,000 b/d and the 2019 record when production was 1.01 million b/d, according to the OPEC Annual Statistical Bulletin. Also, the 2021 results were far from the target of PDVSA's recovery plan.

Average production from JVs accounted for 60% of the total in 2021, or 335,000 b/d, while the remaining 40%, or an average of 225,000 b/d, corresponded to PDVSA's own production, according to the internal report.

The goal in the production recovery plan announced in April by Oil Minister Tareck El Aissami was for an average of 1 million b/d by 2021, of which the JVs would contribute 600,000 b/d.

The output did not grow in 2021 due to multiple factors such as recurring power failures, excess water and sulfur in crude oil, deferred production due to deviations in the contractors' work plan and delays in service contracts, and the acquisition of materials and equipment, according to the report.

In addition, 13 service agreements that PDVSA signed with local companies for the rehabilitation of oil wells did not yield the expected results in 2021.

Oil production that PDVSA left in the hands of local private companies, under the modality of service agreements, fell to 50,700 b/d from 299,200 b/d, a drop of 248,500 b/d, or 83%, over a three-year period, according to a Platts report Dec.15.

The production target for those 13 agreements had been set at 482,500 b/d by 2021 from a base production of 299,200 b/d, but it was not reached.

Performance of JVs

Of the 47 JVs between PDVSA and international partners, 15 have no production, nine have a production below 1,000 b/d, and 15 have a production below 5,000 b/d.

Only eight JVs increased production significantly to a total set of 269,000 b/d. Four JVs in the western fields: Petroboscan, 38,000 b/d average year, Petro Regional del Lago, 12,000 b/d average year, Petrozamora, 22,000 b/d average year, and Petroquiriquire, 11,000 b/d average year.

Others four JVs in the Orinoco Belt increased production, but starting in September when condensate imported from Iran began to be used: Petropiar, 47,000 b/d average year, Sinovensa, 60,000 b/d average year, Petromonagas, 64,000 b/d average year, and Petroindependencia, 15,000 b/d average year.

The JVs Petro San Felix and Petrocedeno where PDVSA has 100% participation raised their production to 10,000 b/d and 12,000 b/d average year, respectively, after remaining closed since 2018.

December output

For the third consecutive month, Venezuelan oil production rebounded thanks to the greater availability of diluents to mix the extra heavy crude from the Orinoco Belt.

In December, the average crude production by PDVSA and its foreign partners rose to 830,000 b/d, 170,000 b/d over November data, according to internal daily production reports.

The Orinoco Belt output rose to 550,000 b/d, 130,000 b/d over the 420,000 b/d reported in November. The crude production at Monagas fields remained at 130,000 b/d. Zulia-Trujillo fields rose to 150,000 b/d, 40,000 b/d over the 110,000 b/d in November.

The recovery of production, especially in the Orinoco Belt, has been possible by imports of diluents from Iran, according to reports.

The 8.5% API extra-heavy crude extracted from the giant Orinoco Belt oil field can only be marketed if it undergoes an upgrading process by blending it with light crude, condensates or naphtha.

PDVSA has received at least three shipments of condensates from Iran since September. Both under the US sanctions, Iran and Venezuela have traded consignments of gasoline and condensates in exchange for Merey 16 crude oil since last year.

Orinoco Belt output in Dec

The daily production reports gave details about the JVs in which PDVSA and foreign partners participate across the four main blocks that comprise the Orinoco Belt oil basin: Carabobo, Ayacucho, Junín and Boyacá. In these blocks, PDVSA has formed seven JVs, with another nine in development stages.

The average crude output during December in the Carabobo block was 276,000 b/d, in Ayacucho 160,000 b/d, in Junín 105,000 b/d, and in Boyacá 9,000 b/d, according to the reports.

The internal document reviewed by Platts contains preliminary and unofficial information that can change at a later date.

PDVSA did not respond immediately to a request for comment.

Sources: PDVSA internal daily production reports