Exclusive: Venezuela's PDVSA sees 2017 oil output stuck near historic lows - document

Fri Jan 13, 2017 8:49am EST
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By Alexandra Ulmer and Brian Ellsworth

CARACAS (Reuters) - Venezuelan state energy company PDVSA projects oil production will remain near 23-year lows in 2017, an internal document shows, suggesting more hardship ahead for the crisis-wrought OPEC member country.

Cash-squeezed PDVSA, which accounts for nearly all of Venezuela's export revenues and is the socialist government's financial motor, saw production tumble by nearly 10 percent in 2016 due to an unraveling economy and low oil prices.

The company's weak finances are causing operational disruptions, and are both affected by and contributing to Venezuela's economic downturn. Three years of recession and soaring prices have pummeled Venezuelans, with many skipping meals and lootings of supermarkets commonplace. Some economists have estimated that gross domestic product contracted by 10 percent or more in 2016.

This year, PDVSA sees production at 2.501 million barrels per day (bpd), an increase of just 5,000 from the 2.496 million bpd for the first 11 months of 2016, according to a nine-year strategic plan presented in December.

That is broadly on par with output levels in 1993, as the struggle to pay providers has led some services companies to halt work and oil suppliers to delay or halt deliveries of fuel and crude.

The 261-page document seen by Reuters gives a rare window into PDVSA, a highly secretive company that seldom publishes detailed business plans. It shows PDVSA expects a shortfall in imported diluents needed for blending with its extra heavy crude output, along with aggressive refinery maintenance plans.

PDVSA did not respond to an email seeking comment on the internal report.

Crude shipments to political ally China, which has lent Venezuela more than $50 billion through a decade-long oil-for-loans program, are slated to increase 55 percent in 2017 from 2016 to reach 550,000 bpd, according to the presentation.   Continued...

The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas, Venezuela January 11, 2017.  REUTERS/Marco Bello