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Venezuela orders Orinoco oil output cuts to meet OPEC pledges -sources
March 22, 2017 / 8:18 PM / 5 months ago

Venezuela orders Orinoco oil output cuts to meet OPEC pledges -sources

CARACAS, March 22 (Reuters) - Venezuela has ordered output cuts in several extra-heavy crude Orinoco Belt fields, including at joint ventures with Russian oil major Rosneft and Italian oil and gas group Eni, to meet OPEC requirements, three sources told Reuters on Wednesday.

Crisis-shaken Venezuela was a major advocate of the output cuts to lift oil prices, but a Reuters survey in February showed the OPEC nation only complied with 7 percent of its pledged 95,000 bpd cut.

Nicolas Maduro's leftist government is seeking to implement the promised cuts, which would ease annoyance towards Venezuela within the Organization of the Petroleum Exporting Countries but could worsen a brutal recession in the shortages-hit country and irritate some foreign partners.

Joint ventures Petromiranda, which state oil firm PDVSA operates with Rosneft, as well as Petrojunin, which it operates with Eni SpA, are affected, according to the oil industry sources, who asked to remain anonymous because they were not authorized to speak about the matter.

Petrourica, a joint venture with China National Petroleum Corp, is also affected, two of the sources added.

The scale and timeframe of the reductions were not immediately clear.

PDVSA, Eni, and Rosneft did not immediately respond to requests for comment.

Petroleos de Venezuela SA, or PDVSA as it is widely known, also reduced output in the Orinoco Belt in 2009 as part of the previous OPEC cuts because most barrels of upgraded or blended crude from that region are not sold under long-term supply contracts, which makes it easier to apply changes. Still, it took years to recover output at the affected projects after the cut.

This time around, OPEC is cutting its output by about 1.2 million barrels per day (bpd) from Jan. 1 - the first such deal since 2008 to get rid of a glut. Non-OPEC countries pledged to cut about half as much.

While compliance has been strong on the back of a steep reduction by Saudi Arabia, other members, including Venezuela, have shown weaker adherence. (Reporting by Alexandra Ulmer; Additional reporting by Vladimir Soldatkin in Moscow and Marianna Parraga in Houston; Editing by Andrew Hay)

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