Venezuela’s state-owned PDVSA has begun reversing oil production cuts made under a strict U.S. oil embargo, as crude oil exports are resuming under U.S. supervision, three sources close to the operations said on Tuesday.
Oil exports from OPEC member Venezuela fell almost to zero in the weeks after the United States imposed a blockade on oil shipments in December, with only Chevron, the biggest U.S. oil company, exporting crude oil from its joint ventures with PDVSA under U.S. license.
The embargo left millions of barrels stuck in tanks and ships on land. As storage filled, PDVSA was forced to close wells and order cuts in oil production at joint ventures in the country.
The state-owned company is now instructing joint ventures to resume production from groups of wells that were closed when a third oil tanker set sail off the coast of Venezuela on Tuesday.
Two supertankers departed Venezuelan waters late on Monday, carrying around 1.8 million barrels of crude oil each, in what could be the first shipment of a 50 million barrel supply deal between Caracas and Washington to get exports back into circulation after the US capture of Venezuelan President Nicolás Maduro.
The country’s overall crude oil production fell to about 880,000 barrels per day (bpd) last week from 1.16 million bpd at the end of November, according to production figures from consultancies that independently track Venezuelan oil production.
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The country’s main oil region, the Orinoco Belt, saw a reduction of about 410,000 bpd compared to 675,000 bpd at the end of November, according to the figures.
PDVSA has not yet confirmed that the 50 million barrel supply agreement has been finalized. The state-owned company had worked to avoid deeper reductions in production, which could be difficult to reverse, as production facilities in some oil fields are dilapidated due to lack of maintenance.
PDVSA and the White House did not immediately respond to requests for comment.
The vessels on Tuesday were heading north from the coast of Venezuela to the Caribbean, according to ship tracking data from LSEG, where many oil companies, including traders, producers and refiners, rent storage tanks. One of the ships was flagging a terminal in the Bahamas as its destination.
Global traders Trafigura and Vitol last week obtained US licenses to trade and trade cargoes of Venezuelan oil, an early victory in the fierce competition among energy companies to secure Venezuelan barrels.
The trading companies did not disclose the volume of exports to which they are entitled, but refineries in the USA and countries such as India and China have started negotiations to buy cargo from the trading companies or through tenders that have not yet been organized.
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