Venezuela's state-owned PdV is seeking to integrate the PetroCedeño heavy crude upgrader into its degraded refining system, implementing technological changes that contributed to the withdrawal of PdV's European partners this week, Venezuelan oil industry sources tell Argus.
"This is an improvisation that risks an industrial accident, and the companies were afraid of that," a senior industry executive said.
France's TotalEnergies and Norway's state-controlled Equinor announced the transfer of their minority stakes in PetroCedeño to PdV this week.
TotalEnergies said it is "focusing new oil investments on low carbon intensity projects, which does not correspond to extra-heavy oil development projects in the Orinoco Belt."
PetroCedeño, formerly known as Sincor, is one of four integrated projects built by international oil companies in the 1990s to upgrade extra-heavy crude from Venezuela's vast Orinoco oil belt into lighter synthetic crude for export. At the time, the upgraders were seen as a showcase of the opening of Venezuela's national oil industry to private investment. In a backlash, the government of late president Hugo Chavez nationalized the upgraders in 2007 and began operating them as one unit. Over the years, PdV neglected maintenance and lacked naphtha needed to produce and transport the 8-10°API Orinoco crude to the upgrading complex at Jose.
Of the four plants, only PetroPiar, PdV's venture with minority partner Chevron, is still partially running. PdV's separate Orinoco blending project with Chinese state-owned partner CNPC at Jose has the steadiest operations, partly because PdV is obligated to provide feedstock to service debt to Beijing.
Faced with chronic gasoline shortages, PdV now wants to restart PetroCedeño to produce partially upgraded crude that would feed its 190,000 b/d Puerto La Cruz refinery.
PetroCedeño was designed to upgrade around 200,000 b/d of Orinoco crude into 180,000 b/d of 30-32°API Zuata Sweet, the lightest syncrude of the four projects. PdV's new goal is to produce an intermediate grade of 26°API Zuata Heavy and transport it to 190,000 b/d Puerto La Cruz for processing.
Although the project is technologically feasible, the risks and challenges lie all across the production chain, from water, sediment and metals in the raw crude to multiple equipment problems at the upgrader and the refinery, the Venezuelan industry sources say.
PdV has a nominal 1.3mn b/d of domestic refining capacity, but only a fraction is operating. US sanctions make it difficult for PdV to secure spare parts and make up for the fuel deficit with imports.
A decade ago PdV contracted China's Wison Engineering and South Korea's Hyundai to carry out a deep conversion project at the Puerto La Cruz refinery. Years later, PdV ran out of money and the project stalled around two-thirds of the way to completion.
