October 10, 2019 / 6:56 PM / 8 days ago

Venezuela's PDVSA expects crude output rebound in 2020 -document

CARACAS, Oct 9 (Reuters) - Venezuela’s cash-strapped state-run oil company PDVSA expects crude output to rebound to above 1.2 million barrels per day (bpd) next year, according to a copy of the company’s 2020 budget seen by Reuters, a figure nearly double current levels.

The undated document did not detail how the company planned to raise crude output, which fell to around 650,000 bpd in September, according to independent estimates.

But in a nod to its financial difficulties, the budget called for an “austerity campaign” with restrictions on employees’ routine business spending, from hailing taxis or renting cars to making international calls and connecting to virtual private networks (VPNs).

PDVSA did not respond to a request for comment.

Oil production in Venezuela has collapsed this year after the United States imposed sanctions on PDVSA, part of Washington’s bid to oust socialist President Nicolas Maduro. In September, PDVSA was forced to cut back output at some oilfields and halt crude blending at its largest producing region, the Orinoco belt, due to climbing inventories of unsold oil.

But output was already declining before sanctions, hurt by years of underinvestment and mismanagement at the OPEC nation’s flagship company.

According to the 2020 budget, PDVSA expects to produce an average of 661,000 bpd of extra-heavy crude from the Orinoco belt in eastern Venezuela, where multinationals like Chevron Corp, Rosneft and CNPC have their major operations in the country.

PDVSA foresees 298,000 bpd from its Western division, mostly around the Maracaibo Lake, and 273,000 bpd from eastern fields north of the Orinoco belt.

The company is also forecasting it will earn $60 per barrel of exported crude next year. Mexico is drafting its 2020 budget at a price of $49 per barrel for its exportable oil basket, which is comparable in quality to Venezuela’s.

Additional austerity measures announced by the company included “the suspension of all armored vehicle rentals” as well as a requirement that the company’s chairman approve hotel stays. Workers are prohibited from charging hotel food, laundry, parking and printing to the company.

The budget also asks employees to reduce business travel and “use videoconferences to avoid costs.” It calls on employees to “reduce expenses for snacks, stationery, office supplies, photocopying, printing and binding to the maximum.”

“Any type of entertainment, social events or sponsorships are suspended, unless authorized by the chairman of PDVSA,” the document read.

Reporting by Mayela Armas and Luc Cohen, additional reporting by Marianna Parraga in Mexico City, Editing by Rosalba O'Brien

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below