Venezuela: despite the iranian support, the difficult recovery of oil and gas refineries

Venezuela: malgré le soutien iranien, la difficile relance des raffineries pétrolières

Caracas | If five oil tankers sent by Tehran to Venezuela have docked nearly three refineries in the country, that the government of president Nicolas Maduro intends to relaunch, the promise leaves skeptical experts.

The facilities of venezuela normally have the capacity to process 1.3 million barrels per day (ptm) of crude and fuels. But they had worked only 12% of their potential in the first quarter of 2020, according to figures provided to AFP by a source in the sector.

According to Ivan Freites, a trade unionist, the refineries have not produced “a liter of gasoline”, all occupied, they were to refine the heavy crude for export. Because the government, sanctioned by Washington, dc, desperately needs the cash to import, as production and oil prices are at their lowest.

It is in this context that there arrived the five vessels carrying 1.5 million barrels of fuels, additives, spare parts and other materials. The oil minister, Tareck El Aissami, said it would use the help of Tehran, one of the allies of Nicolas Maduro, to “straighten” the refining capacity and oil production in the country.

But is it so easy? “Even in a regime that is not subjected to penalties, where you could import without restrictions (…) it would take a lot of time”, explains to the AFP Henkel Garcia, director of the financial firm Econométrica.

Gold revive the refineries is essential, not only to cope with the fuel shortages, but also to refine the extra-heavy oil of venezuela.

According to the company’s S&P Global Platts, the country has had to reduce in recent weeks crude production because of “limited storage” and the lack of “light oil” to thin the crude extra-heavy and make it transportable. In April, according to the Organization of petroleum exporting countries (OPEC), its production was 620,000 bj, compared to 3.2 million twelve years ago.

Up to 2018, before the new us sanctions, Venezuela was sending up to 500,000 bd of crude in the United States and received in this country 120.000 bj light oil and additives.

“A challenge”

Another problem for the recovery of the refineries, according to the trade unionist, Ivan Freites, 80% of the “qualified personnel” is party due to the degradation of working conditions.

Of the five boats that arrived from Iran, came to the megacomplexe refinery Paraguana (north-west) that is currently processing 955 000 barrels per day, far short of its past performance.

According to Eudit Girot, head of the Federation of oil workers, the revival of this complex, one of the largest in the world, “is a challenge”, but it is also the one who is “in worse condition”. It is estimated that six months will be needed, at best, to start to stabilize the operations.

Three other vessels have docked at El Palito (centre), a complex with a refining capacity of 140,000 bj. This refinery is the closest to Caracas, during the confinement imposed by the pandemic Covid-19 has not been immune to the shortages affecting for years the other regions of the country.

The government has tried to revive it a few weeks ago with the support of Iran, which had already been delivered by plane from the equipment to the refineries. According to Mr. Girot, the production has reached 35 000 bj, but there are many stops due to the deterioration of the equipment.

“The problem is not to raise, but ensure that it is operating safely and sustainable,” he says.

The last ship has arrived at the refinery of Puerto La Cruz (north-west), which has a potential refining of 187 000 bj, but “it is the stop from 2017,” recalls Eudit Girot.

Until the end of may, gasoline was almost free for venezuelans. But since the 1st of June, prices have been revised upward. A little late to the expert oil Luis Oliveros, which reminds us that this near-free education has cost the State $ 10 billion per year.

Share Button