Page 4 - LatAmOil Week 19 2020

LatAmOil COMMENTARY LatAmOil
Argentina’s Plaza Huincul refinery has resumed operations but is still working below full capacity (Photo: Du Pont)
Signs of downstream recovery
Refineries in Argentina, Brazil and Colombia are increasing throughput, in contrast to plants in Peru
WHAT:
Capacity utilisation levels are creeping back up from the lows reported in March and April.
WHY:
Governments are easing some of the restrictions they imposed in a bid to slow the spread of the coronavirus pandemic.
WHAT NEXT:
Downstream operators will not rush to return to normal, as some lockdown measures remain in place.
LAST week, Repsol’s Peruvian division revealed that it had reduced capacity utilisation at its refinery in La Pampilla. The plant is capable of processing 117,000 barrels per day (bpd) of oil but is operating at about one third of design capacity, according to Luis Vasquez, Repsol’s supply and retail director in Peru.
Speaking during a webinar organised by Peru’s Society of Mining, Oil and Energy, Vasquez said his company had cut refinery runs because of the recent decline in demand for petroleum products. Since March 16, the date that the government imposed a lockdown to curb the spread of the coronavirus ~(COVID- 19) pandemic, Peruvian fuel consumption has dropped by about 70%, he said.
As a result, he continued, the refinery in La Pampilla has no reason to process all of its feed- stock and no place to put every barrel of fuel it produces. Since the plant’s crude oil and petro- leum storage tanks are completely full, Repsol has had to charter a tanker for use as floating storage, he said.
Carlos Barriento, the head of the national oil company (NOC) PetroPeru, voiced similar frustrations during the webinar. He reported that PetroPeru was also confronting problems related to an oversupply of oil and inadequate storage capacity. Additionally, he noted that two of the company’s three refineries remained in shutdown mode because of weak fuel demand. The third refinery, the 15,500 bpd Conchan plant in Lima, went offline in March and only resumed production in late April, when it began working at half of its usual capacity, he said.
Both Vasquez and Barriento were speaking
in terms that are likely to be familiar to their col- leagues around the world. Repsol and PetroP-
eru are two of many refinery operators that
have been hit hard by the events of the last two months – that is, by the combination of demand destruction resulting from public health meas-
ures meant to rein in the coronavirus outbreak, inadequate storage capacity and the plunge in
prices triggered by the collapse of the OPEC+ production deal. 
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