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 plc more info
Operates 33 Offshore Rigs
 - Exxon, BP Targeted in NYC Suit That Relies on 'Nuisance' Theory (Jan 10)
 - Owners of Louisiana-Illinois Pipeline Eye Reversal Next Steps (Dec 21)
 - Canadian Offshore Oil Interest Grows As Pipeline Woes Sink Alberta Prices (Dec 20)
Company: Exxon Mobil Corporation more info
Operates 16 Offshore Rigs
 - ExxonMobil Reports Papua New Guinea Discovery (Jan 16)
 - Exxon, BP Targeted in NYC Suit That Relies on 'Nuisance' Theory (Jan 10)
 - ExxonMobil Reports More Offshore Guyana Success (Jan 05)
Company: Statoil more info
Operates 1 Offshore Rigs
 - Statoil May Build Onshore Terminal for Castberg Oil -Minister (Jan 16)
 - Canadian Offshore Oil Interest Grows As Pipeline Woes Sink Alberta Prices (Dec 20)
 - Sharp Fall In Applications For Norway's Arctic Oil Permits (Dec 05)
Company: Total S.A. more info
 - Total Starts Up Antwerp Refinery And Petrochem Complex After Upgrade (Nov 30)
 - Hoegh LNG: Pakistan LNG Import Project Consortium Folds (Nov 16)
 - France's Total Buys Engie's LNG Business For $1.5B (Nov 08)
Company: ConocoPhillips more info
Operates 12 Offshore Rigs
 - Exxon, BP Targeted in NYC Suit That Relies on 'Nuisance' Theory (Jan 10)
 - ConocoPhillips Vows Financial Discipline As Aims To Boost Output (Nov 08)
 - ConocoPhillips' Profit Beats Estimates, But Budget Cut 10% (Oct 26)
Company: Chevron Corporation more info
 - CB&I, Chevron Lummus Global, Saudi Aramco Launch 'Crude-to-Chemical' JV (Jan 18)
 - Oil Producers Want New Hearing on Impact of Magellan Proposal (Jan 17)
 - Exxon, BP Targeted in NYC Suit That Relies on 'Nuisance' Theory (Jan 10)
Company: OPEC more info
 - OPEC's Cheer Over 2018 Oil Rally Tinged By Shale Worries (Jan 09)
 - OPEC's Oil Cuts Claim a Victim as Supertanker Earnings Crash (Jan 09)
 - BLOG: What do Rigzone Readers Think of the OPEC/NOPEC Deal? (Dec 07)
Company: International Energy Agency (IEA) more info
 - IEA Sees Oil Markets Tightening As Venezuelan Output Collapses (Jan 19)
 - IEA: US To Account For Most World Oil Output Growth Over 10 Years (Nov 16)
 - IEA: China's Crude Oil Buying Spree Looks Set To Continue (Oct 12)
Company: Petrozuata more 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: Sincor more 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 08)
Company: Cerro Negro more 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 06)
Company: Ameriven more 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)