PDVSA urges US to expand refinery capacity; strengthen trade ties

By OGJ editors
WASHINGTON, DC, Mar. 16 -- A top energy official with the state-run Petróleos de Venezuela SA urged US government and industry leaders to expand US refinery capacity.

Luis Vierma, Venezuelan hydrocarbons vice-minister and PDVSA director, spoke at the Energy Council's 2004 Conference, held in Washington, DC, last week.

"It becomes urgent to discuss and seek agreement on the matter of energy policy and investment required to increase refining capacity in the Atlantic basin, for the purpose of meeting a growing oil products demand, especially in the US," warned Vierma, according to a company press release dated Monday.

"The decision to undertake the task of overcoming this imminent deficit in refining capacity should be taken shortly, because it takes from 3 to 5 years to build a new refinery," Vierma said. "The US particularly has little room for maneuver in increasing its processing capacity and, moreover, in meeting operational contingencies in their refining plant."

Vierma's comments come as international crude prices reach record-highs and with it the likelihood that gasoline and diesel prices also will increase dramatically.

Venezuela is typically one of the US's top four crude and product importers and is the world's fifth largest oil and gas exporter. PDVSA says it supplies the US nearly 15% of its crude oil and refined product imports.

According to the US Energy Information Administration's latest monthly analysis, even if unexpected significant refinery or pipeline disruptions are avoided, national monthly average regular unleaded gasoline prices may reach a peak of about $1.83/gal this spring. Summer (April to September) gasoline prices now are expected to average about $1.74/gal for 2004. This would be a record in nominal dollar terms and the highest inflation-adjusted summer average since 1985, EIA said.

For 2004 as a whole, national regular gasoline pump prices are now expected to average $1.67/gal, 10¢/gal higher than its previous projection.

EIA said about half of the increase reflects higher crude oil prices, with the remainder reflecting the impact of low inventories, robust demand, and—in perhaps a veiled reference to Venezuela—"uncertain availability of gasoline imports."

Repairing strains
Vierma sought to dispel supply concerns, urging US policymakers to forge a stronger bond with Venezuela despite recent strains over the US's disapproval of President Hugo Chávez's socialist government (OGJ Online, Feb. 2, 2004).

"[Vierma] reiterated Venezuela's wish to keep open all available communications and contact channels on energy with the United States, with the aim of reinforcing the safety and reliability of hydrocarbons supplies," the PDVSA release said. "And [he] referred to the efforts already being made in this direction by the Ministry of Energy and Mines and the Venezuelan Embassy in Washington, where Ambassador Bernardo Alvarez and Minister Counselor for Energy Affairs Fadi Kabboul maintain an intense and ongoing agenda of contacts with government, legislative, financial, and business leaders in the US."

Vierma's remarks followed a decision by PDVSA's top management to shift its corporate structure back toward the way business units were organized before last year's strike. PDVSA's labor problems did not topple Chávez from power but they did succeed in crippling production and dramatically cutting back US imports for a few months last year. PDVSA now says the company has recovered and remains committed to supplying the US.

Nevertheless relations between Caracas and Washington remain frayed. Meanwhile, the political climate in Venezuela grows increasingly unstable. Venezuela's Supreme Court ruled Monday that recall signatures demanding a new presidential vote this year were valid, reversing a National Elections Council decision. Chávez is seeking an appeal. If the referendum does not take place, the next presidential election occurs in 2006.

Related Articles

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations

07/06/2015

Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Woodside lets contracts for Browse LNG project

07/06/2015 Woodside Petroleum Ltd. has let more contracts for the Browse floating LNG project offshore Western Australia. The contracts, awarded to a Technip-...

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...

Nelson-Farrar Quarterly Costimating Indexes for selected equipment items

07/06/2015 The Nelson-Farrar refinery construction index rose to 2,475.6 by December 2012 from 2,467.4 in January of the same year. The index continued to ris...

The price of oil and OPEC-history repeating?

07/06/2015 The world oil market today is characterized by a standoff between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers a...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected