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Venezuela oil flows tumbling, tensions spiral

  • Spanish Market: Crude oil, Natural gas, Oil products
  • 20/03/20

Venezuela's oil production is tumbling and tensions are spiraling as the double blow of collapsed oil prices and coronavirus descends across the Opec country.

Crude output has now fallen to around 500,000 b/d, as some fields are shut in, others are curtailed and more workers abandon operations to shelter from contagion.

National oil company PdV and its minority partners had been sustaining production of around 700,000-800,000 b/d for months despite escalating US sanctions and related export and storage bottlenecks.

According to oil industry participants, at least 150,000 b/d of medium and heavy crude is at risk of closure around Lake Maracaibo, the heart of PdV's western division, because it is no longer economic to produce, oil industry participants tell Argus.

The western division has struggled to stay afloat for years because of a lack of stable power supply and a host of other operational problems such as labor flight and equipment theft.

The main surviving projects, PetroBoscan with minority partner Chevron and PetroZamora with Russian partners, are now winding down or closed altogether.

In PdV's eastern division headquartered in Monagas state, an explosion and fire at around 2:30am ET at a gas separation unit in the El Carito flow station at the Punta de Mata district has knocked out at least another 35,000 b/d, plus 150mn cf/d of gas.

The eastern division had already been subject to curtailments of around 150,000 b/d because of logistical constraints.

PdV's Orinoco division, which had been producing roughly 500,000 b/d of extra-heavy crude, is now down to as low as 200,000 b/d, Argus is told.

The Orinoco oil belt supplies upgrading and blending plants at the Jose complex. The only two of these plants that are still partially operating are PdV's PetroPiar upgrader with Chevron and PdV's PetroSinovensa blending plant with Chinese state-owned CNPC.

PdV's three other upgraders — PetroCedeno with Total and Equinor, PetroMonagas with Russia's state-controlled Rosneft and wholly owned Petro San Felix — have long been shut down.

Following years of mismanagement, corruption and sanctions, Venezuela is considered the least equipped of any Latin American country to control the spread of the coronavirus. The official caseload is still only in the double digits, while all large neighboring countries now have hundreds.

Looting has broken out in several Venezuelan cities, and fuel is running out, impeding limited food and aid delivery.

Talking to the enemy

Faced with potential catastrophe, quiet talks are underway between Venezuela's US-sanctioned government and neighboring Colombia to coordinate health assistance through international organizations, Argus has confirmed with two sources. The contacts are an extraordinary departure from years of hostility. Colombia is among the more than 50 nations that recognize Venezuelan opposition leader Juan Guaido as interim president, in place of Nicolas Maduro who maintains control on the ground.

The talks reflect growing dread in Bogota that a meltdown in Venezuela would reverberate in Colombia. The two countries share a porous border of more than 2,000km. An estimated 2mn Venezuelan migrants are already in Colombia, which closed its official border crossings with Venezuela earlier this month.

Despite overwhelming need, Venezuelan opposition efforts to bring in aid independently of the Maduro government are hamstrung by limited international recognition, political infighting and logistical hurdles.


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12/03/25

Brazil's Marquise Ambiental invests in 6 RNG plants

Brazil's Marquise Ambiental invests in 6 RNG plants

Sao Paulo, 12 March (Argus) — Brazilian landfill company Marquise Ambiental will invest R400mn ($68mn) in six biogas plants with an estimated total output of around 40.8mn m³/yr. The six plants will be in southeastern Sao Paulo state, northeastern Ceara and Rio Grande do Norte states, and northern Rondonia and Amazonas states, the company said. The Amazonas state plant, in the capital Manaus, is set to produce up to 18mn m³/yr of biogas and should prevent 300,000 metric tonnes (t) of CO2 equivalent (CO2e) from being released into the atmosphere. The Sao Paulo plant is forecast to produce 4.6mn m³/yr, while the Ceara plant is set to produce 2.8mn m³/yr. Meanwhile, the Rio Grande do Norte state plants, Braseco and Potiguar, are forecast to have output of 9mn m³/yr and 4mn m³/yr, respectively. The Rondonia plant is set to have an output of 2.1mn m³/yr, according to the company. The investment will happen in the next three years, but the company did not disclose when operations at each plant will begin. Marquise Ambiental has one 36.5mn m³/yr plant operating in Ceara , dubbed GNR Fortaleza. It is a joint venture between the firm and gas company Ecometano. By Maria Frazatto Planned Marquise biogas plants m³/yr Name State Capacity Osasco Sao Paulo 4,687,000 Braseco Rio Grande do Norte 9,007,000 Potiguar Rio Grande do Norte 4,097,000 Aquiraz Ceara 2,853,000 Manaus Amazonas 18,092,000 Porto Velho Rondonia 2,160,000 Total 40,896,000 Marquise Ambiental Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Low gas storage bookings may drive German stockdraw


12/03/25
12/03/25

Low gas storage bookings may drive German stockdraw

London, 12 March (Argus) — Low gas storage bookings for gas year 2025-26 may already be driving withdrawals and may continue to do so in the coming months. German stocks were at about 79.8TWh on Tuesday morning, filling 31.8pc of capacity. That was well below the 131TWh three-year average for this date and the 171TWh in storage a year earlier. Stronger withdrawals this winter were at least partly driven by higher heating demand as well as slower European imports of LNG and Russian pipeline gas compared with a year earlier. But market dynamics for upcoming storage years may also be encouraging withdrawals. A backwardated forward curve, with prompt prices holding substantially higher than contracts in winter 2025-26 and further along the curve, has incentivised the stockdraw over maintaining stocks. That said, prices for the summer quarters have risen above the prompt recently, so some firms could have a slight incentive to keep gas in storage past the end of this storage year. But the inverted THE summer-winter spread has disincentivised capacity bookings for the upcoming storage year. Summer prices holding above winter prices removes the commercial incentive to inject or book storage space profitably. And storage operators have struggled to sell space in recent months, with many auctions closing unsuccessfully as bidders cannot profitably hedge injections for the contract period. In the prevailing environment, only about 55pc of all German storage space has been booked for the 2025-26 storage year, leaving at least 103.5TWh of capacity unallocated, data show ( see data and download ). By contrast, firms had booked 99.7pc of German capacity for the 2024-25 storage year. Storage sites with low or no bookings might be driving withdrawals, as firms near the end of some storage contracts. At sites where some capacity is booked for the next storage year, firms could sell their stocks to other capacity holders if there is no financial incentive for withdrawing it. But at the six sites with no 2025-26 bookings yet — Rehden, Wolfersberg, Harsefeld, Frankenthal, the VNG-operated Jemgum caverns and SEFE's Speicherzone Nord — firms cannot sell gas in-store as there are no available buyers to transfer gas-in-store to, incentivising firms to empty stocks ahead of the summer 2025 filling season. Consequently, sites with no booked capacity for the upcoming storage year currently are filled less than most other German sites ( see graph ). The remaining sites suggests a correlation between 2025-26 bookings and stocks, as sites with a lower proportion of capacity booked for the next storage year tend to be less full, following stronger withdrawals this winter ( see withdrawals trajectory graph ). Stock dilemma Before the 2024-25 storage year ends on 31 March, any capacity holder left with stocks must decide either to withdraw that gas or sell it to a company holding 2025-26 capacity, if there is sufficient storage space booked at the individual site. Barring additional capacity sales, that suggests that about 7TWh may need to be withdrawn on contractual grounds alone, not accounting for weather or withdrawals from fully-booked sites. About 5.6TWh of that is stored at Rehden, Germany's largest storage site, whose operator SEFE Storage allows capacity holders to withdraw 10pc of their stocks up to two months after the storage year ends . Rehden was filled to 12.1pc of capacity on Tuesday morning, leaving about 1TWh to be withdrawn even if all capacity holders utilise that 10pc allowance. Four of the six sites with no 2025-26 bookings are depleted fields or aquifers, which have lower withdrawal and injection rates than salt caverns and offer capacity holders less flexibility to react to unusual price spreads. Caverns often offer faster injection and withdrawal speeds, so could still be used economically in summer by, for example, reacting to price volatility rather than seasonal spreads. Faster cycling also allows cavern capacity holders to wait longer before starting pre-winter injections, potentially allowing them to wait until the summer-winter spread normalises before injecting. Slower-cycling sites such as aquifers and depleted fields are usually drawn down more consistently in winter as their slower injections and withdrawals reduce their flexibility. That said, some operators might need to inject into caverns to maintain their structural integrity. This might stop withdrawals or possibly support a minimum of injections ahead of or early in the filling season. German storage operator Uniper Energy Storage bought some gas to store as de-facto cushion gas at its Etzel EGL and Etzel ESE sites last week to comply with German law. Restrictions on minimum pressure are enforced by mining authorities and can differ by site, storage operators have told Argus . By Lucas Waelbroeck Boix and Till Stehr Storage bookings next year vs current fill level % Fill level trajectories grouped by site type % Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec sticks to demand forecasts despite trade tensions


12/03/25
12/03/25

Opec sticks to demand forecasts despite trade tensions

London, 12 March (Argus) — Opec has kept its oil demand growth forecasts unchanged for both 2025 and 2026 on expectations that the global economy will adjust to volatile trade policies. US president Donald Trump has imposed tariffs on various goods arriving in the US from China, Mexico and Canada, as well as on all imports of steel and aluminium. Some countries have retaliated with tariffs of their own on US imports, raising the prospect of a full-blown trade war. But Opec is confident that the global economy can adapt. "Price pressures may weigh on global growth but are unlikely to disrupt overall growth momentum, which remains supported by resilient consumer demand and strong output in major emerging economies," Opec said in its latest Monthly Oil Market Report (MOMR). Opec also said that rising trade among emerging economies could partially offset tariff-related disruptions, but it warned that "downside risks need to be monitored given uncertainties in policy rollout and subsequent effects and impacts". Despite the uncertainty, Opec kept its oil demand forecast for this year and next unchanged for the second month in a row. For this year, the group sees oil demand growing by 1.45mn b/d to 105.2mn b/d, while in 2026 it sees consumption increasing by 1.43mn b/d to 106.63mn b/d. Opec's demand growth forecasts remain somewhat higher than those projected by the IEA and the US' EIA. In terms of supply, the group kept its non-Opec+ liquids growth forecast unchanged at 1mn b/d for both 2025 and 2026, with most of this growth seen coming from the US, Brazil and Canada. Opec+ crude production — including Mexico — rose by 363,000 b/d to 41.011mn b/d in February, according to an average of secondary sources that includes Argus . Opec puts the call on Opec+ crude at 42.6mn b/d in 2025 and 42.9mn b/d in 2026, unchanged from last month. Eight members of the wider Opec+ alliance earlier this month agreed to start increasing crude output from April, citing "healthy market fundamentals and the positive market outlook". By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Chevron to produce Group III+ base oils in US


12/03/25
12/03/25

Chevron to produce Group III+ base oils in US

London, 12 March (Argus) — Chevron said it will begin Group III+ base oils production in the US, becoming the first domestic producer of these grades in North America. The Group III+, named NEXBASE 4 XP, will be produced at Chevron's 25,000 b/d base oils plant in Pascagoula, Mississippi, from the fourth quarter of 2026. Chevron will join Malaysian state-owned Petronas and South Korean Producer SK Enmove as the only global producers of Group III+, and could compete with these for market share in North America. "NEXBASE 4 XP will be globally available, starting with hubs across Europe, which will help customers optimise supply logistics and costs," said Chevron base oils general manager Alicia Logan. Use of Group III+ base oils in premium grade lubricants is rising as equipment manufacturers seek to meet the latest engine approvals. The new production will add to Chevron's portfolio of Group II, Group II+ and Group III base oils. Chevron in 2022 acquired Finish refiner Neste's Group III business , including 250,000 t/yr of Group III nameplate capacity from Finland's 197,000 b/d Porvoo refinery and 180,000 t/yr or 45pc of base oil nameplate capacity from Bahrain's 262,000 b/d Sitra refinery through a joint-venture agreement with Bapco. By Gabriella Twining Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US, Canada to meet Thursday on USMCA


11/03/25
11/03/25

US, Canada to meet Thursday on USMCA

Houston, 11 March (Argus) — US and Canadian officials will meet later this week to begin discussing an update to the US-Mexico-Canada (USMCA) free trade agreement. In posts on social media Tuesday afternoon, US secretary of Commerce Howard Lutnick and Ontario premier Doug Ford said they would meet on 13 March "... to discuss a renewed USMCA ahead of the April 2 reciprocal tariff deadline." In response, Ontario has agreed to suspend its 25pc surcharge on exports of electricity to Michigan, New York and Minnesota. Ford and Lutnick talked by phone on Tuesday following US president Donald Trump's threats to double tariffs on Canadian steel and aluminum . Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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