Venezuela’s state-run oil company PDVSA is asking some joint ventures to cut back crude production amid an export paralysis, three sources close to the decision said on Sunday, adding pressure to an interim government trying to hang on to power.
The moves include shutting down oilfields or well clusters as stocks stored onshore mount and the company runs out of diluents to blend Venezuela’s heavy crude for shipment.
Caracas is in political crisis under an interim government after President Nicolas Maduro and his wife were extracted by U.S. forces on Saturday. The OPEC country’s oil exports, its main source of revenue, have been at a standstill following a U.S. blockade on tankers under sanctions and the seizure of two oil cargoes last month.
Chevron’s cargoes bound for the U.S. had been an exception, continuing to move, because the company has a license from Washington for its operations. But since Thursday, even those have stopped, shipping data showed on Sunday.
As part of his announcement of Maduro’s detention and a transition overseen by the U.S., President Donald Trump said on Saturday that an “oil embargo” on the country was in full force.
PDVSA’s request to reduce oil production was made to joint ventures including China National Petroleum Corporation’s (CNPC) Petrolera Sinovensa, Chevron’s Petropiar and Petroboscan and Petromonagas, the sources said. Petromangas, previously operated by PDVSA and Russian state-run Roszarubezhneft, is being run solely by PDVSA.
PDVSA and CNPC did not immediately reply to requests for comment. Chevron said on Sunday it continues to operate “in full compliance with all relevant laws and regulations,” without providing details.
Workers at Sinovensa on Sunday were preparing to disconnect up to 10 well clusters, one of the sources said, due to a PDVSA request after an over-accumulation of extra heavy crude and diluents shortage. However, the wells could be quickly reconnected in the future, the person added.
On its side, Chevron has not cut product output yet as it has some room to keep storing, particularly at Petropiar, and tankers have not stopped loading. However, its vessels have not left the country’s waters in recent days and storage capacity is limited at Petroboscan, which could ultimately lead to cuts, another source said.
Venezuela’s oil minister Delcy Rodriguez, who is now Venezuela’s interim president, said last month the country would continue producing and exporting oil despite the U.S. measures
(Reporting by Marianna Parraga and Reuters Staff; Editing by Julia Symmes-Cobb and Cynthia Osterman)