January 4 (Reuters) – Venezuela's state oil company PDVSA is asking some of its joint ventures to reduce crude production due to a halt in exports, according to three sources familiar with the matter. This situation adds more stress to the interim government trying to maintain power.
The political crisis in Caracas deepened after U.S. forces captured President Nicolas Maduro and his wife on Saturday. Oil exports, which are critical for Venezuela's economy, are now at a standstill due to a U.S. blockade affecting tankers and the seizure of two oil shipments last month.
Chevron’s cargoes destined for the U.S. had been a rare exception and continued to flow because the company holds a license from Washington. However, those shipments have also stopped since Thursday, shipping data revealed on Sunday.
During the announcement regarding Maduro’s capture and the change in government overseen by the U.S., President Donald Trump stated that an “oil embargo” on Venezuela is now fully implemented.
In response, PDVSA is shutting down certain oilfields and well clusters due to rising oil stocks onshore and a shortage of diluents needed to prepare Venezuela’s heavy crude for shipping.
The requests were made to joint ventures that include China National Petroleum Corporation’s (CNPC) Petrolera Sinovensa, Chevron’s Petropiar, Petroboscan, and Petromonagas. Petromonagas, which was previously operated by PDVSA and Russian state company Roszarubezhneft, is currently managed solely by PDVSA.
PDVSA and CNPC have not yet responded to inquiries for comments. Chevron announced it continues to operate “in full compliance with all relevant laws and regulations,” but did not provide additional details.
Workers at Sinovensa were preparing to disconnect up to 10 well clusters at PDVSA’s request on Sunday due to an oversupply of extra heavy crude and the shortage of diluents. Nevertheless, the wells could be quickly reconnected in the future, a source mentioned.
A part of Sinovensa’s oil production typically goes to China as payment for debt. However, two Chinese supertankers that were en route to Venezuela to load oil halted at the end of December, according to shipping data from LSEG.
Chevron has not reduced its production yet as it still has some storage capacity, particularly at Petropiar, and tankers have not stopped loading. However, its vessels have not departed from Venezuelan waters since Thursday, and storage at Petroboscan is limited, which could lead to production cuts, according to another source.
Venezuelan oil minister Delcy Rodriguez, who is now the interim president, stated last month that the country would continue oil production and exports despite U.S. actions.
However, U.S. pressure has compelled PDVSA to store oil in vessels since late December and reduce cargo deliveries at its main port, Jose. If tankers cannot leave the port, company executives and analysts believe that production cuts will be necessary.
No tankers were at the Jose port on Sunday to load for either export or domestic distribution, as reported by TankerTrackers.com.
In the latter half of last year, PDVSA increased imports of essential naphtha and light oil to dilute its extra heavy crude output, but began experiencing issues receiving shipments from Russia in December due to the blockade.
Venezuela’s oil exports averaged about 950,000 barrels per day (bpd) in November, but due to U.S. measures, this figure dropped to around 500,000 bpd last month based on initial ship movement data.