Venezuela's refining mayhem
Venezuela used to be between the top refining hubs not only in the Americas but probably in the world, being the Complejo Refinador Paraguana (Refining Complex of Paraguana) located at the western part of the country, the single largest refining centre of the region with a processing ratio of close to 2MMBD, comprising the refineries of Amuay and Cardon, henceforth keeping domestic consumption and exports of gasoline and other refined products in a healthy and strong ways. But not anymore.
And ever since the onset of the Bolivarian Revolution, between the myriads of problems that the venezuelan oil and gas sector have been experiencing and aggravating considerably, refining has been the hardest hit, especially due to the acute and rampant corruption, lack of adequate investments and allocation of fundings to revamping all the decaying refineries, and also lack of maintenances of plants and other critical facilities important and sensitive for the production of gasolines and naphtas to name the most important at due time, coupled with the growing emigration of skilled workers from PDVSA searching for better wages, impacting enormously the refining capacity of Venezuela.
Consequently, accidents have been more than recurrent impacting heavily every singled refining unit in venezuelan soil as well as in ISLA, which is leased to PDVSA by the government of Cura?ao, prompting it to search for new clients to operate this refinery in the last months, eroding therefore the country’s once mighty and solid refining production to dismal levels (around 650.000 barrels per day) and inflicting serious harm to the domestic gasoline supplies and the growing scarcity of motor oil, making gasoline lines a thing to stay for a long time in Venezuela, with the potential to become a volatile political issue for the Maduro administration in coming months.
At the same time, this specific crisis has prompted Venezuela to gradually become an importer of refined products, most of the times from the United States and the Caribbean, causing in this sense an important shift in the energy landscape of the region with important negative implications for Venezuela and its government, especially losing its markets of products allocations for the country members of PETROCARIBE, a mechanism slowly fading away in terms of relevance, meaning in the end a critical geopolitical against the Bolivarian Revolution in the Caribbean basin and allowing a coming back to the United States as a new energy influencer in the region.
Therefore, all things said, for Venezuela its urgent to engineer a massive process of revamping its entire refining system, which according to many union leaders in the oil sector with knowledge of this situation, is working at less than 50% of its installed capacity and the outlook for being less, just for the sake of its heavy domestic use of gasolines for almost every sector and especially for transportation, in order to prevent a total collapse of the country.