Venezuela Aims to Nearly Triple Oil Output This Year

Venezuela Aims to Nearly Triple Oil Output This Year
PDVSA has imported a key component needed to achieve its goal of almost tripling crude production, defying United States sanctions.

(Bloomberg) -- Venezuela’s state-owned oil company imported a key component needed to achieve its goal of almost tripling crude production, defying U.S. efforts to isolate the Maduro regime’s grip on power.

The supertanker Rene is discharging a hydrocarbon known as condensate at the Venezuelan port of Jose, according to a document seen by Bloomberg. It’s the first such import since September, when Petroleos de Venezuela SA took delivery of a cargo of Iranian condensate, which is needed to thin the country’s extra-thick grade of crude.

The origin of the cargo aboard the Rene remains a mystery because the vessel’s satellite transponder has been switched off. The Panamanian-flagged tanker’s most-recent port of call was in the Indian Ocean nation of Sri Lanka, according to the document.

Venezuela wants to boost oil production to 1.5 million barrels a day by the end of this year, which would be almost three times the current output of 529,000. The owner of the world’s largest oil reserves has been struggling to raise production under the weight of sanctions, equipment breakdowns, a dearth of crucial chemicals, and a humanitarian crisis that sparked a diaspora of 5.4 million people.

Tar-like Venezuelan oil needs to be thinned with diluents such as condensate, an ultra-light type of oil, so that it can be processed in refineries. PDVSA is reliant on foreign condensate supplies because domestic production has collapsed.

“The diluents will help PDVSA sustain, if not increase, production of extra-heavy crude grades,” said Fernando Ferreira, a director of geopolitical risk at Rapidan Energy.

Since the U.S. ratcheted up sanctions against Venezuela in January 2019 the country has bought oil from Iran and Nigeria.

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