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Venezuela’s refining woes
HOUSTON
Petroleumworld.com, Mar 14, 2008Fires, accidents, and unplanned maintenance shutdowns have become commonplace at Venezuela’s refineries. The problems are symptomatic of the ailments afflicting state-owned oil giant PDVSA: lack of qualified personnel and a shortage of cash. And if PDVSA (which operates all domestic refineries) cannot reliably manage its existing refineries, how will it ever hope to expand its domestic refining capacity beyond the current 1.28 million barrels per day?
PDVSA reported roughly a dozen outages last year, which included a host of problems in late 2007 at its 305,000 barrel per day Cardón refinery. In October, motorists in the city of Barquisimeto were forced to endure hours-long queues at gasoline service stations, after problems at the 140,000 bbl/d El Palito refinery reduced the local supply of fuel. Already this year, the 635,000 bbl/d-capacity Amuay refinery has closed down at least once.The refining problems are bound to get worse, as the infrastructure problems become increasingly expensive to fix and the outages force PDVSA to import gasoline at high prices. Meanwhile, domestic consumption of gasoline shows no sign of slowing down, largely due to the fact that Venezuelan gasoline is some of the cheapest in the world. These inefficiencies in turn will make it difficult for the company to come up with the extra $10.5 billion it wants for the expansion of its refining operations. Simply put, if that money is available, PDVSA will need to spend a good chunk of it just to keep its existing capacity online.
Story by Randy Woods from Energy Tribune
Energy Tribune 13 03 08Copyright© 2008 respective author or news agency. All rights reserved.
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