Venezuela plans storing stead cutting

Jun 09, 1998 02:00 AM

Apr. 8, 1998 Venezuela will store some of its 200,000 bpd reduction under the world oil producers' agreement instead of actually cutting production, PDVSA president Luis Giusti said. PDVSA has extensive storage facilities around the world, with a total 40 mm barrel capacity.
Mr Giusti did not say how much of the 200,000 bpd cutback would go into storage or if the oil producing countries in the pact agreed that storage could be counted as output reduction.
Another top PDVSA official, strategic planning co-ordinator David Escojido, said the reduction pact may only last a few months instead of until the end of the year as had been previously announced. "We're saying that the cuts could be for 3 months if we see the market react much faster," Mr Escojido said. "We're not saying now it's 9 months, we're not saying it's up to the end of the year. If by 2 or 3 months the problem is solved and the market is in agreement, we can start opening production in an organised way."

Venezuela, Saudi Arabia and Mexico were the prime movers in last month's pact between OPEC and non-OPEC producers to roll back production by 1.1 mm bpd in order to boost plummeting oil prices.
Meanwhile, PDVSA is now estimating the 1998 price for the Venezuelan basket of crudes at $ 13 per barrel in its budget calculations. It is the fourth revision of the oil price, with the original estimate at $ 15.50.
The Venezuelan government, which derives about 40 % of its revenue from oil income, is facing a deficit of $ 2.7 bn due to the price plunge which has also led PDVSA to lop $ 800 mm off its 1998 investment budget.

Source: not available
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