PDVSA maintenance — surging or backing up?

You can see the growing list of maintenance projects that PDVSA is seeking to contract out by going to the company’s daily list of domestic RFPs. The number of pages in this document has multiplied 10-fold in the past year, from about 50 pages daily to almost 500.

What’s unclear about this change is whether this means PDVSA has started to issue more maintenance contracts, or whether the backlog of projects is just growing and growing. I have heard from vendors that the contracting and payments remains slow, so I suspet it’s the latter. If you have any first-hand information about what’s going on with contracting, you know where to reach me.

Going a bit OT into BPland

It’s a testiment to humanity’s terrestrial bias that the BP-produced daily “Oil Impact Assessment Map” shows only the impact on beaches, rather than the vast impact on the sea. Even the U.S. government data is just based on testing of water “near shore.”

I could have sworn the U.S. was the world leader in deep-water studies, with buoys all over the Pacific and a big fleet of submarines. It’s almost as if they don’t want to know how bad things are.

Orange Mousse

I think I preferred the chocolate milk.

Update May 30: In response to the question in comments, here’s the general website for the cleanup and here’s the page with maps. Looking at these maps gives us something to do while busy not weaning the world from hydrocarbons.

PDVSA to become regional government?

I’m still traveling, and will be for another 10 days, so continued light posting expected. And that’s my excuse for the delay on this one, too.

It’s a long-running, unfunny joke in Venezuela that nobody knows whether the government runs PDVSA or vice versa. The lines have blurred steadily more in recent years, as PDVSA took on such diverse tasks as controlling all transportation on Lake Maracaibo, growing soybeans and sugarcane and building an oil rig factory. Now, Energy Minister Rafael Ramirez may be planning to expand into direct governance of territory.

In an interview published yesterday in Panorama, the Maracaibo daily, Ramirez said:

—Hay versiones de prensa que indican que la Costa Oriental del Lago se empobreció. ¡Mira estos números! Nosotros tenemos acá 59 mil trabajadores: 32 mil trabajadores directos y 27 mil de las empresas contratistas. Tenemos una inversión de 25.200 millones de bolívares, eso son 25, 2 billones de los viejos, tenemos una producción de 900 mil barriles al día de petróleo, tenemos una actividad permanente. No sé de dónde vienen esas matrices.

No vamos a ir contra otros prestadores de servicios. Nos vamos a atener a lo que dice la ley. El resto de las actividades no nos interesan.

Pero ahora que tenemos el control y garantizamos la operatividad de nuestras instalaciones, venimos a una replanificación de la Costa Oriental del Lago.

La Costa Oriental del Lago era un desastre, no estaba diseñada en función de una visión en conjunto sino que cada empresa tenía su propia visión, entonces estamos preparando la creación de una zona especial, de un complejo industrial petrolero en la Costa Oriental, que nos va a permitir hacer importantes inversiones en el área de fabricación, reparación e instalaciones industriales para darle servicio a la industria.

—¿Esta zona especial estará regentada por Pdvsa?

—¡Claro! Se trata de que hagamos una zona que esté unificada y que nos permita actuar de manera concentrada en un rediseño de la misma y ampliar sus capacidades, porque teníamos una cantidad de instalaciones y muelles en muy mal estado que ahora estamos recuperando, y una capacidad industrial ociosa muy grande, debido a que cada empresario atendía la parte del negocio que le interesaba.

Vamos a hacer una optimización de esos espacios y vamos a utilizar al máximo el gran potencial de la Costa Oriental. Toda la COL se va a ver impactada por la creación de esta zona. Recuerda también que el presidente Chávez se ha propuesto, en los distrito motores de desarrollo, una zona especial para la Costa Oriental, es decir, que le vamos a entrar por dos frentes: uno por el área netamente petrolera, y el otro por el área de desarrollo integral.

That is to say something like:

There are press accounts saying that the west [uff. corrected throughout.] east coast of Lake Maracaibo is getting poorer. Look at these numbers. We have here 59,000 workers, 32,000 direct employees and 27,000 in contractors. We have an investment of 25.2 billion bolivars, that’s 25.2 trillion old bolivars, we have a production of 900,000 barrels a day of oil, we have a permanent presence. I don’t know where these ideas come from.

We’re not going after other service providers. We’re going to attend to what the law says. The rest of the [non-maritime] activities don’t interest us.

But now that we have control and guarantee the operability of our installations, we arrive at a re-planning of the east coast of the lake.

The east coast of the lake was a disaster area. It wasn’t designed with a unified vision but rather each business had its own vision, and so we’re preparing the creation of a special zone, with an oil-industry complex in the east coast, that will allow us to make key investments in the areas of industrial fabrication, repair and installation to serve the industry.

Panorama: And this special zone will be run by PDVSA?

Ramirez: Of course! It will be attempted that we have a region that’s unified and that allows us to act in a concentrated way in its redesign and to expand its capabilities, because we had a number of installations and piers in very bad shape that are now reclaimed, and a very big unused industrial capacity, due to each businessman attending to the part of the business that interested him.

We’re going to do an optimization of these spaces and we’re going to maximize the use of the great potential of the east coast of the lake. The whole region will be impacted by the creation of this zone. Recall as well that it was proposed by President Chavez that in the local engines of development, a special zone for the east coast, that is to say that we are going to enter it from two fronts: one for the fundamentally oil region and one for the integrated development region.

The east coast of the lake, which Ramirez is referring to, is in the state of Zulia, where the governorship is in the hands of an opponent of President Chavez.

Venezuela saves electricity in April

Venezuela used less electricity in April than in any April since 2006, the Centro Nacional de Gestión said this week in a monthly report. The country used 9,078 megawatt-hours of electricity, down 9.3 percent from a year earlier.

As has been the pattern in prior months, most of the savings come from Edelca, the utility that supplies heavy industry in the east of the country, and EDC, the utility for Caracas. For the first time, Cadafe, the utility with the widest customer base, also conserved, cutting consumption by 3.9 percent year over year.

Valencia and Barquisimeto increased electricity consumption by 16 and 17 percent, respectively.

Diesel consumption grew 37 percent year-over-year to 69,000 barrels a day, the highest on record. Based on the average U.S. spot diesel price in the first week of April, the opportunity cost of burning that diesel grew to $8.6 million a day from $7.8 million the prior month.

Peru goes after U.S. oil exec, Ecopetrol deal at stake

Yes, Peru. I break my vow to do original reporting rather than news aggregating, mostly because the Inter-Press Service news wire never gets wide enough play for its often very interesting stories. They say Ecopetrol and Korea National Oil Co.’s big-bucks buy into a Peru oilfield last year may be nullified unless somoene coughs up $482 million in taxes — more than half the value of the Ecopetrol-KNOC buy. IPS reports:

Peruvian Congress Calls in Debt from U.S. Oil Executive

By Ángel Páez

LIMA , May 26, 2010 (IPS) – The Peruvian Congress has opened proceedings to demand that U.S. businessman William Kallop pay the Treasury 482.2 million dollars — taxes on the 900-million-dollar sale of a petroleum company and other debts to the government.

PetroTech Peruana (PTP) was sold Feb. 6, 2009, to Ecopetrol, the Colombian state oil company, and the South Korean National Oil Corporation (KNOC) in a transaction conducted in the United States.

With the U.S. Offshore International Group serving as intermediary, the sale was made outside of Peru in order to evade taxes, concluded a special commission of the unicameral Congress, presided by Jhony Peralta, which investigated PTP’s activities since its founding by Kallop in 1993.

“The Peruvian government could nullify the sale of PTP to Ecopetrol and KNOC because they violated the laws that require the payment of taxes,” Peralta told IPS. He noted that conducting the sale abroad does not exempt it from taxes associated with the change in ownership of a Peruvian company. MORE…

Portable generators about half as efficient as power plants

Fun fact for electricity geeks. I’ve wondered for a while how home generators compare to big central power plants when it comes to producing electricity. After all, I’ve been living in a country (Venezuela) where more and more of the load is going to be covered by these little portable units, and I wanted to know how this would affect gasoline and diesel exports.

I happened across a spec sheet for Honda portable generators up to 6 kilowatts. According to my math, they convert between 13% and 18% of the power in gasoline into electrical energy, when running at their “rated load,” usually about 10% lower than their maximum load.

This is a little better than half as efficient as fixed power plants.

The gasoline-powered generators produce at best 6.13 kilowatt-hours per gallon of fuel, at worst 4.42, and a median of 5.7.

Fixed power plants in Venezuela (I use it because I have it handy – feel free to correct me) in the first quarter of 2010 produced 11.1 kilowatt-hours of electricity per gallon of diesel.

So, to produce a megawatt of power, you need to feed little Honda generators about twice as many gallons of gasoline as the number of gallons of diesel that you would have fed to power plants for the same amount of electricity. Since both gasoline and diesel are effectively free in Venezuela, this means that providing the same social good will cost the state oil company twice as much per unit of electricity produced using small home power plants.

Thank you for geeking out with me. Now back to the pretty pictures.

More on that oily lagoon

The oil industry pollutes.

The dirtiness of the industry is too easy to forget amid conversations about the effect of oil money on a nation’s politics, the effect of OPEC on the world economy, or corruption in contracting. They’re all important, but the background to it all is that the oil industry is nasty. The whole game is about finding the tarry remains of slow-cooked mesozoic and paleozoic algae, poking holes into the ancient seabeds where these delicacies have converted into a carcinogenic soup and collected harmlessly for tens to hundreds of millions of years, pumping it up, cooking and separating it into component chemicals, and selling it to billions of customers. At each stage in the game, there are countless pipes and valves and transfers of a stinky, slippery liquid. There’s no way to avoid it: a bit will get lost to the air, the water, the soil. The trick is to get that “bit” to be as small as possible.

Crude oil’s most water-soluble and possibly most toxic constituent is benzene, which is banned from U.S. tap water at concentrations above 5 parts per billion. That’s a half an ounce per olympic-sized swimming pool.

What’s amazing is that people consume 84 million barrels a day of this stuff, more than 4.8 cubic kilometers a year, and normally, the percentage that escapes to surface environments like soils, rivers and Gulfs of Mexicos before being burned is so close to zero that few people know what crude oil smells like. (I say “normally” because the current Gulf spill appears to be a big increase from the usual level of industry crappiness.) Even the more pedestrian gasoline and motor oil are witnessed mostly as droplets on the asphalt landscape of filling stations rather than wholesale spills.

One place where oil escapes from the supply chain is at the wellhead. Oil fields are often flooded with underground water, which comes up with the crude. For example, Pacific Rubiales Corp. has fields in Colombia where every barrel of oil comes up with five or more barrels of water. That water needs to be disposed of. In North America, it’s often injected into another formation. (I know I’m paranoid, but this strikes me as the “if anyone gets sick, it’ll be far enough from here that it’ll take them forever to pin the blame on me” strategy.) Rubiales used to treat its water and dump it in a river; they are working on wells to inject hundreds of thousands of barrels a day into the ground. When there are retention ponds like the one shown in the pictures below, U.S. rules say to cover them in fencing to keep migratory waterfowl from becoming flying tarballs.

Bird in oilfield. Don't fret, it was born that color.

It’s a shame that Venezuela, like most OPEC countries, doesn’t do enough to keep its oil industry clean. I think international environmental groups and most of all supporters of the Venezuelan government should speak up.

That said, one shouldn’t overstate the case. In April, I snorkeled at Puinare, a beach in the harbor at Puerto La Cruz. The bay, which includes both Puerto la Cruz and Jose, is the busiest oil port in Venezuela, with more than 90 laden tankers departing monthly. The live coral started within meters of shore. I floated in an endless school of electric blue minnows and dived alongside the omnipresent parrotfish. Rocks were crusted with fragile invertebrates, including thousands of white and red serpulid worms, tiny christmas trees that disappear into their shells with the slightest perturbation. It was one of the healthiest-looking underwater environments I have seen, putting to shame anything I saw in the oil-free but hurricane-frought Yucatan.

There are also macro benefits to the oil industry. The availability of oil money has probably done more to protect Venezuela’s Amazon than any number of forest rangers could have. It’s the lighter side of Dutch Disease. Illegal logging and slash-and-burn agriculture, which have decimated rain forests from Brazil to Madagascar, are export industries. In an oil state, non-oil export industries don’t fare well, reducing the pressure to log and convert the wilderness into pasture.

Anyway, a couple pictures. Enjoy.

My friend using a stick to pull up waxy, tarry guck from the surface of the water

Pond with scum of produced oil in foreground

Ride a bike!

The Germans wrote a nice book in English telling city leaders around the world how to get more people onto bikes. I haven’t read it all but it looks pretty comprehensive and attractive. Gives lots of due credit to places like Bogotá and Santiago de Chile for making their cities so remarkably bikeable.

If you’re keen on making the rest of South America into a more efficient, fun and creative place, check out this book and pass it along to your favorite mayor. “Cycling-Inclusive Policy Development: A Handbook” is free for download.

Venezuela rationing changes – we’ll see

I wrote a lot about the rationing changes in Venezuela, and WordPress.com, which I don’t recommend, just lost it all. But the short answer to Jakob’s question:

In Venezuela, Chavez is saying that the power-rationing that has been necessary for the last few months is coming to an end…but where is Setty to tell us what is really going on??

is, so far, it’s unclear that this will make a whole lot of difference. If the basic industries and Caracas are going to stick with their savings programs, the only effect of these new measures is that it will free people psychologically to waste even more. But as I wrote before, the rolling blackouts didn’t save energy, and in fact the areas under rolling-blackout rationing all increased energy consumption. A lot.

The best part of this is that the courts will be back in service for more than three hours a day.

The bad news is that the wasteful habits people developed under the blackout rationing system are likely to stay. Without blackouts, that means power use is likely to increase even more. And if they get rid of the rationing for Caracas and the basic industries, Guri’s recent slight recovery is likely to slow, and my call of a bigger crisis in 2011 will become almost a certainty, with or without an unusually rainy season.

Meanwhile Igor Gavidia, who is apparently more or less in charge of the power rationing, says that the power waste in Venezuela is a result of capitalism encouraging waste. Spanish speakers with 18 minutes to spare on some prize demagoguery are encouraged to listen.