Page 14 - LatAmOil Week 21 2020

LatAmOil VENEZUELA LatAmOil
The coker is one of several units at the Cardon refinery that have been offline for more than a year. The shutdown stems partly from the Ven- ezuelan government’s inability to ensure steady deliveries of crude feedstock or provide reliable utility services. But it is also a consequence of PdVSA’s inability to perform repair and main- tenance work.
Within the last month, the plant has man- aged to bring four units (including a vacuum distillation unit, an atmospheric distillation unit and a gas unit, as well as the delayed coking unit) back on stream, though at less than full capac- ity. It succeeded in doing so even though US sanctions prevented it from buying new parts and equipment on the open market. Instead, it used a combination of parts and equipment that were removed from other idled refineries and with Chinese and Iranian-made parts that were delivered to Caracas by Mahan Air, a state- owned Iranian airline.
The piecemeal nature of the recent repair and maintenance work will affect the functioning of the restarted refinery units, according to Argus Media’s sources. The coker and the other facili- ties will only be able to operate at 50% of capacity or less, as they are in “generally poor condition,” one source said.™
The Cardon refinery has been idle for over a year (Image: Mercopress)
BRAZIL
Shell starts drilling at Saturn block
THE Anglo-Dutch oil major Royal Dutch Shell has begun drilling at Saturn, a block in the San- tos Basin offshore Brazil.
André Araujo, the head of Shell’s Brazilian unit, announced the spudding of the first well at Saturn last week, during a livestream broad- cast hosted by the Valor Econômico newspaper. He did not offer many details but did note that Shell had also started drilling at Gato do Mato, another Santos Basin field, earlier this year.
Shell is currently the second-largest oil pro- ducer in Brazil after state-run Petrobras. It has a 45% stake in Saturn and also serves as operator of the block. The remaining equity in the pro- ject is split between the US supermajor Chev- ron, which also has a 45% stake, and Colombia’s state-run energy firm Ecopetrol, which owns the remaining 10%. The consortium won the block in an auction in 2018.
During the broadcast last week, Araujo described Brazil’s pre-salt layer as a “strategic area of great interest” and “extremely produc- tive.” He also noted, though, that the South American country’s oil industry would have to work hard to remain attractive to investors in the current low-price environment, according to a Reuters report.
If Brazil’s oil industry is not prepared to com- pete, he added, it may see some market players begin to move their investments elsewhere. “Without a doubt, investments will migrate to those countries and projects that are more attractive,” he said.
Araujo also asserted said that oil companies would have to face the possibility that invest- ments will drop in the future.
Brazil has been hit hard by the coronavirus (COVID-19) pandemic, which has reduced global energy demand, and by the decline in crude oil prices. Likewise, Petrobras is feeling the pinch. Earlier this year, it said it planned to reduce its investment budget to $8.5bn in 2020, down by nearly a third.
The downturn has also affected Petrobras’ efforts to raise funds by selling off certain assets, including the Marlim fields, which lie off the coast of Rio de Janeiro State in the pre-salt zone. The company began preparing for the sale of the Marlim cluster earlier this year but put its plans on hold earlier in May. The cluster is home to four fields that yielded 243,000 barrels of oil equivalent per day (boepd) on average in March. (This represented around 10% of the company’s total output.) ™
The Saturn block lies in the Santos basin (Image: Petrobras)
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Week 21 28•May•2020