Energy
President Hugo Chávez made a clear call: the Venezuelan oil industry must be prepared for contingency in case of attack against the country and must stop oil shipments to the United States.

Pdvsa sources immediately said that they were ready to respond and declared yellow alert. Nevertheless, the oil holding is actually dealing with operational failures that hit production at Venezuela's leading company. Further, the conglomerate is faced with several international lawsuits, some of them filed by US firms.

Refining issues are among the most urgent problems Pdvsa is currently facing.

Jesús Sánchez, the general manager of El Palito refinery, told daily newspaper El Carabobeño that his staff is on yellow alert, in accordance with the instructions issued by President Hugo Chávez.

However, beyond that, Sánchez said that Pdvsa staff is working "to repair the boiler of the fluidized catalytic cracking unit (FCC) of the refinery, which was damaged by an explosion." He added that repairs could take several days. "We will start up the plant and we will optimize fuel production" over the weekend or early next week, he said.

On July 17, a boiler that generated 600 pounds of steam exploded, as a result of an emergency shutdown that occurred after a power failure when the autotransformer of the 400 power line in Planta Centro's phase S, one of Latin America's largest thermal power plants, was damaged.

According to daily newspaper El Carabobeño, from that date the production of fuel was halted. However, Pdvsa has said that it has sufficient inventory to meet demand.

The units that produce gasoline at three Pdvsa's refineries (El Palito, Cardón and Amuay) have been halted due to technical failures or due to maintenance work, according to Reuters. Production in two out of the three closed plants amounts to 124,000 bpd.

Simultaneously, Pdvsa is facing a billionaire international arbitration process and must meet outstanding payments due to the policy of nationalization of oil industries.

There are currently 11 pending arbitration processes against Venezuela before the International Centre for Settlement of Investment Disputes (Icsid), World Bank, involving over USD 43.5 billion in compensation claims, according to Reuters.

Out of that total, the complaints of Exxon Mobil and Conoco Phillips, which were filed in 2007, amount to USD 40 billion.

Translated by Gerardo Cárdenas