Venezuela crude output in key region plunges due to diluent shortage

The drop comes as state oil company PDVSA directs more medium and light crudes to refining to boost supplies of scarce motor fuel in the crisis-stricken OPEC nation, leaving little to dilute the Orinoco’s tar-like crude into exportable grades.

Diluent shortages could threaten the relative stability in the South American country’s oil output and exports in 2021, after years of underinvestment followed by U.S. sanctions sent crude production – the lifeblood of Venezuela’s economy – plummeting to multi-decade lows last year.

The Orinoco belt produced some 288,000 barrels on Aug. 26 and 298,000 barrels on Aug. 31, down from 400,000 barrels on Aug. 8, according to PDVSA production reports seen by Reuters. Venezuela’s total output averaged 614,000 bpd in July, according to figures the country provided to OPEC.

The Aug. 31 and Aug. 26 reports said low diluent inventories were a cause of reduced output at three of the belt’s biggest projects: PDVSA’s Sinovensa, Petromonagas and Petropiar joint ventures with China National Petroleum Corp, Russia’s Roszarubezhneft and Chevron Corp, respectively.

PDVSA, which holds majority stakes in all three joint ventures, did not immediately respond to a request for comment.