Dec. 11, 2002 – Labor turmoil in the oil-rich country of Venezuela is causing the Hovensa refinery to cut its daily output of petroleum products substantially.
The South American country is home to the huge state-owned Petroleos de Venezuela, S.A., Hovensa's oil-producing partner commonly known by its Spanish-language acronym, PDVSA.
Hovensa spokesman Alex A. Moorhead said on Wednesday that talks with PDVSA officials led to the decision to cut back production.
PDVSA "has notified our company that it is temporarily unable to continue supplying heavy crude oil to our company due to the strike of its employees," he said. "As a result of this development, Hovensa has substantially reduced its crude oil refining rate."
Moorhead, Hovensa's vice president for government affairs and community relations, said the reduction is now planned to be in effect until the end of December and on that basis will not translate into any layoffs of personnel.
PDVSA and Amerada Hess, parent company of Hess Oil of the Virgin Islands, formed Hovensa as a joint venture in early 2000 to build and operate the $600 million coker plant that was completed in August. The coker enables the refinery to process a heavier and less-expensive grade of crude oil than previously had been possible. Most of that crude comes from Venezuela.
The Hovensa refinery produces approximately of 440,000 barrels a day of gasoline and other petroleum products. According to a corporate official at Amerada Hess, about 270,000 barrels a day of the crude that Hovensa refines comes from PDVSA.
The official, Carl Tursi, Amerada Hess vice president and corporate secretary, said last Thursday that Hovensa was then operating at 100 percent capacity despite a general strike in Venezuela that had been joined by oil tanker pilots. An interruption in shipping would not immediately affect production, he said, because of large reserves of both crude and processed petroleum at the St. Croix refinery.
The strike is in protest of the Venezuela's president, Hugo Chavez, who was ousted in a coup last April but reclaimed power two days later.
Moorhead said refinery officials are monitoring events in Venezuela and will take further action if necessary.
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