VZCZCXYZ0003
RR RUEHWEB

DE RUEHCV #2227/01 2081441
ZNY CCCCC ZZH
R 271441Z JUL 06
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 5624
INFO RUEHHH/OPEC COLLECTIVE
RUEHAC/AMEMBASSY ASUNCION 0668
RUEHBO/AMEMBASSY BOGOTA 6816
RUEHBR/AMEMBASSY BRASILIA 5649
RUEHBU/AMEMBASSY BUENOS AIRES 1347
RUEHLP/AMEMBASSY LA PAZ JUL LIMA 0453
RUEHSP/AMEMBASSY PORT OF SPAIN 3209
RUEHQT/AMEMBASSY QUITO 2290
RUEHSG/AMEMBASSY SANTIAGO 3653
RUEHDG/AMEMBASSY SANTO DOMINGO 0275
RHEHAAA/WHITEHOUSE WASHDC
RHEBAAA/DEPT OF ENERGY
RUCNDT/USMISSION USUN NEW YORK 0390
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L CARACAS 002227 
 
SIPDIS 
 
SIPDIS 
 
ENERGY FOR CDAY, DPUMPHREY, AND ALOCKWOOD 
NSC FOR DTOMLINSON 
 
E.O. 12958: DECL: 07/07/2016 
TAGS: ECON ENRG EPET ENIV VE
SUBJECT: REFINERY FIRE FUELS RUMORS 
 
Classified By: Economic Counselor Andrew N. Bowen for Reason 1.4 (D) 
 
¶1. (C) SUMMARY: A fire broke out at the Amuay Refinery, part 
of the Paraguana Refining Complex, the world's largest 
refinery, on July 17.  Experts state the fire will result in 
a gasoline production curtailment of 100 to 120 thousand 
barrels per day and that it will take four to five months to 
replace the unit.   PDVSA claims the accident will not have 
any impact on its ability to meet international and national 
supply commitments.  PDVSA and the BRV have gone to great 
lengths to impose an information blackout on the fire.  END 
SUMMARY 
 
--------------------------- 
NO BIG DEAL, REALLY, HONEST 
--------------------------- 
¶2.  (C) A fire broke out at Tower T-401, part of the crude 
distillation unit Number 5 at the Amuay Refinery, on July 17. 
 A local analyst told Petroleum Attache (Petatt) on July 26 
that the unit was out of operation.  According to the 
analyst, it will take four to five months for PDVSA to 
rebuild the unit.  PDVSA has publicly stated the unit will be 
back on line in two months time.  It claims that the tower 
was the only part of the distillation unit that sustained 
serious damage.  The analyst also stated PDVSA would have to 
rebuild a unit that heated oil before it entered the 
distillation unit as well as repair some damage to 
distillation unit Number 4. 
 
¶3. (C)  The unit had an installed capacity of 225 thousand 
barrels per day but its actual maximum capacity was around 
190 thousand barrels per day.  PDVSA has not operated the 
unit above 190 thousand barrels since 2003.  The analyst 
believes production will drop by around 100 to 120 thousand 
barrels per day.  Units 1 to 4 of the refinery are expected 
to pick up around 20 thousand barrels per day in production. 
PDVSA Vice President for Refining Alejandro Granado has 
publicly stated the accident will not have any effect on 
PDVSA's ability to meet its national and international supply 
commitments.  (NOTE: Venezuela's daily consumption of 
gasoline and diesel was 315 thousand barrels per day in March 
¶2006.  END NOTE)  The analyst stated traders told him that 
PDVSA may have placed orders for atypical imports such as 
MTBE.  MTBE is a gasoline additive that Amauy produces.  The 
analyst also stated he believed PDVSA would sell some oil on 
the spot markets that normally would go to Amuay for refining. 
 
¶4.  (C)  The Paraguana Refining Complex, the largest in the 
world, has an installed capacity of roughly 940 thousand 
barrels per day but currently operates at around 780 thousand 
barrels per day.  The majority of the shortfall has come from 
the Amuay Refinery, which has been running at around 470 
thousand barrels per day.  The complex has been plagued with 
a series of accidents during the past year and experts 
predict that it will continue to have them. 
 
-------------------------------- 
YOU CAN ASK BUT WE WILL NOT TELL 
-------------------------------- 
¶5.  (C) Both PDVSA and the BRV have gone out of their way to 
impose an information blackout on the fire.  With the 
exception of a few tepid comments from PDVSA officials, very 
little information has entered the public domain.  As a 
result, rumors have flourished in the local press as well as 
in the oil sector.  It appears that PDVSA has also tried to 
limit information to its own employees and contractors. 
During a meeting with a shipping executive on July 18, Petatt 
raised the subject of the fire.  The executive offered to 
contact his personnel who worked at the refinery and had 
almost unlimited access.  The shipping personnel told the 
executive that the area around the fire had been completely 
sealed off and that access to it was closely monitored. 
 
 
¶6.  (C) It also appears that PDVSA may be using the accident 
as an excuse to make its less than transparent operations 
even more opaque.  A reporter for a major U.S. newspaper told 
Petatt on July 27 that a PDVSA official denied his request 
for an installation tour in another part of the country on 
the grounds of the Amauy fire.  The official stated as a 
result of the fire all journalistic visits to PDVSA 
facilities are canceled for "reasons of security". 
BROWNFIELD