Venezuelan crude output falls 5pc in Aug: ministry

OREANDA-NEWS. September 09, 2016. Venezuela issued official crude production data of 2.328mn b/d in August, down 4.9pc from officially reported output of 2.447mn b/d in July.

The 119,000 b/d drop in Venezuelan officially reported crude output last month matched a decline of 120,000 b/d in first half 2016 that energy minister and state-owned PdV chief executive Eulogio Del Pino confirmed in July.

According to a terse energy ministry statement issued yesterday, Venezuela produced 108,000 b/d of NGLs in August compared with 103,000 b/d in July. PdV and foreign companies produced 94,400 b/d of condensate compared with 88,000 b/d in July.

All of August's increased condensate production came from the offshore Perla gas field operated by the Cardon 4 joint venture in which Spain?s Repsol and Italy?s Eni are 50:50 partners.

Del Pino had attributed PdV's first half 2016 crude production decline to aggressive power rationing by state-owned utility Corpoelec, which officially suspended nationwide rationing in June.

The ministry's new statement did not explain why production has declined for an eighth consecutive month.

PdV's total average liquids production of 2.436mn b/d in August 2016 was 424,000 b/d or 14.8pc lower than the company?s average 2015 production of 2.86mn b/d, energy ministry figures show.

Del Pino pledged in July that PdV would increase crude production by up to 200,000 b/d in second half 2016. But the new official data suggest that the PdV has not been able to snap the downward trend so far.

Argus estimates PdV's crude output likely fell below 2mn b/d in August, with most of the decline coming from aging light and medium-quality oil fields in PdV?s legacy eastern and western divisions.

Net natural gas production, not including reinjected volumes, averaged 5.16bn ft3/d in August compared with 5.6bn ft3/d in July, the ministry said, attributing the decline to efforts in northern Monagas state to recover reservoir pressure and reduce flaring.

While the production trends are not surprising, the statement itself is unusual, and could reflect pressure from financial creditors for more transparency, or a push by Del Pino to draw internal attention to the industry?s plight.

Among the operational factors behind the downturn is the effective withdrawal of key oil field services contractors such as Schlumberger because of unpaid invoices.

PdV signed debt refinancing deals with contractors Halliburton and Weatherford that assures both companies will not scale down their operations, Del Pino said last month. The energy ministry and PdV have declined to give details of those agreements. Halliburton and Weatherford have not commented.