Orinoco Projects Ordered to Cut Shipments

Venezuela's government has instructed the four Orinoco crude oil projects to reduce synthetic crude exports by 3.3 million barrels a month, or 110,000b/d, energy and oil minister Rafael Ramirez told reporters.

The move is aimed at boosting oil prices and comes in the wake of the new government policy announcement involving the nationalization of Orinoco projects.

More specifically, the reduction is part of Venezuela's compliance with OPEC cuts. Last year, OPEC countries agreed to reduce production a combined 1.7 million b/d in two tranches.

"We have instructed the companies [to focus] the reduction on the exportable volumes, starting in January," Ramirez said. "The market needs to perceive there is strict compliance."

The reduction will focus on the synthetic crude exported after upgrading takes place rather than the heavy crude produced.

The four Orinoco projects are Ameriven, Petrozuata, Cerro Negro and Sincor.

Ameriven will have to reduce synthetic exports 800,000b/m, Petrozuata 700,000b/m, Cerro Negro 1.1 million b/m and Sincor 700,000b/m.

In the case of Sincor, the largest producer with 200,000b/d, the reduction is more than 10% of output. In the case of smaller operations such as Cerro Negro, the reduction amounts to 30%.

The four projects have a capacity to produce 620,000b/d but, according to the International Energy Agency, are churning out less than 600,000b/d.

Private-sector partners in Orinoco include ExxonMobil (NYSE: XOM), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX), Statoil (NYSE: STO), Total (NYSE: TOT) and BP (NYSE: BP).

Venezuela's oil export basket price lost US$3.59/b in the week January 8-12 from the week before, closing at US$46.87/b.

The oil basket has declined almost US$20/b since August 7-11, when it hit an all-time high of US$65.81/b.

Visit BNamericas to access our real-time news reports, 10-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.

Related Companies
 Company: BP plcmore info

 - Unite Expresses Concern Over Possible Forties Pipeline System Sale (Mar 17)
 - BP Appoints New Heads Of Production, Drilling As Output Set To Jump (Mar 16)
 - Wood Group Wins Mad Dog 2 Contracts (Mar 14)
 Company: Exxon Mobil Corporationmore info

 - Gulf Of Mexico Lease Sale Nets $315M in Bids, Feds Suggest Trump Bounce (Mar 22)
 - Oil Giants Upending Shale Turf Where Wildcat Drillers Once Ruled (Mar 21)
 - ExxonMobil Agrees to Buy 25% Stake in Mozambique's Area 4 Block (Mar 9)
 Company: Statoilmore info

 - Statoil Exec: Effective Leaders Should Empower People and Machines (Mar 24)
 - Statoil Makes North Sea Oil, Gas Discovery (Mar 24)
 - Gulf Of Mexico Lease Sale Nets $315M in Bids, Feds Suggest Trump Bounce (Mar 22)
 Company: Total S.A.more info
 - Total Starts Up Moho Nord Deep Offshore Project (Mar 15)
 - Chevron Commences Oil, Gas Production from Angola Project (Mar 9)
 - Oil Majors Still Years From Repairing Balance Sheets After Price War (Mar 8)
 Company: ConocoPhillipsmore info

 - ConocoPhillips CEO Talks Talent Shortage and Learning in the Downturn (Mar 7)
 - Shell Shuns New Oil Sands as Low Crude Prices Force Cost Control (Feb 27)
 - Origin To Take A$1.9B Charge On LNG, Exploration Assets (Feb 15)
 Company: Chevron Corporationmore info
 - Gulf Of Mexico Lease Sale Nets $315M in Bids, Feds Suggest Trump Bounce (Mar 22)
 - China's Sinopec Buys First Major African Refinery In Chevron Deal (Mar 22)
 - Oil Giants Upending Shale Turf Where Wildcat Drillers Once Ruled (Mar 21)
 Company: OPECmore info
 - BLOG: Decisions, Decisions - Will OPEC/NOPEC Extend Oil Production Cuts? (Mar 23)
 - OPEC Can't Count on American Drivers to Help Boost Oil Prices (Mar 16)
 - Saudi Says Oil-Supply Cuts May Be Extended If Necessary (Mar 16)
 Company: International Energy Agency (IEA)more info
 - IEA's Birol: 20% Upstream Investment Needed This Year (Mar 6)
 - IEA Says Record OPEC Cut Compliance Helps Oil Market Rebalance (Feb 10)
 - IEA: Climate Policy Will Not Dampen Upstream Investment (Jan 30)
 Company: Petrozuatamore info
 - PDVSA Underscores Pricing of Tender Offer for Petrozuata Project Bonds (Sep 12)
 - Ramirez: Cerro Negro, Sincor Resisting Nationalization (Jan 17)
 - Orinoco Projects Ordered to Cut Shipments (Jan 17)
 Company: Sincormore info
 - Total in Fresh Talks with Venezuela on Expanding Ops (Jan 30)
 - Total Production Increases Along with Rising Oil Prices Q4 2007 (Feb 13)
 - Venezuela: Sincor Officially Transformed into a Mixed Company (Feb 8)
 Company: Cerro Negromore info
 - Ramirez: Cerro Negro, Sincor Resisting Nationalization (Jan 17)
 - Orinoco Projects Ordered to Cut Shipments (Jan 17)
 - Fitch Explains Rationale Behind Downgrade of Venezuela's Heavy Oil Projects (Jul 6)
 Company: Amerivenmore info
 - Orinoco Projects Ordered to Cut Shipments (Jan 17)
 - Orinoco Projects Could Double Output in 2-3 Years (Jun 28)
 - Moody's Downgrades Orinoco Heavy Projects to B1 (Jun 23)

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Production Analyst
Expertise: Accounting|Financial Analyst
Location: Midland, TX
Provisioning/Supply Analyst
Expertise: Inventory Control|Purchasing
Location: Hanover, MD
US Houston: Accounting Supervisor (Financial Forecasting)
Expertise: Accounting|Financial Analyst
Location: Houston, TX
search for more jobs

Brent Crude Oil : $50.56/BBL 0.15%
Light Crude Oil : $47.7/BBL 0.70%
Natural Gas : $3.05/MMBtu 1.32%
Updated in last 24 hours