The state of Venezuela’s oil industry — like the rest of the country, really — continued to decay after a recent announcement that ExxonMobil Corp. would be ending its partnership with Venezuela’s national oil company, Petróleos de Venezuela SA (PdVSA). The two corporations currently have a joint ownership on one particular refinery in Louisiana, but after it is sold to PBF Energy Inc. for $322 million, the two companies will be parting ways.
PBF Energy is a New Jersey-based oil corporation, which owns and run three refineries on the East Coast and in Ohio. The Louisiana Chalmette refinery isn’t exactly a big refinery by American standards, although it’s in an ideal location — just a few miles from New Orleans — to take advantage of crude oil resources.
The largest refineries in the U.S. can produce about 300,000 barrels of crude oil per day, and Chalmette produces about 189,000 barrels per day; nevertheless, the acquisition will allow PBF to increase its oil production by about 35%, according to the Wall Street Journal, bringing the company’s total daily oil production to around 725,000 barrels per day.
For ExxonMobil, losing its 50% in Chalmette isn’t necessarily a big loss. The company still owns and operates six major oil refineries in the U.S., reports the WSJ, producing over 1.8 million barrels daily.
But for PdVSA, losing a 50% in the refinery will certainly have negative impacts on the Venezuelan economy. Venezuela is the fourth-largest supplier of crude oil to the U.S., writes the Latin American Herald Tribune, and the Venezuelan oil industry has been one of the few industries, in the past few years especially, keeping the country away from a complete economic breakdown.
Most recently, however, Venezuela’s oil industry hasn’t been helping its economy at all. As the Times-Picayune explains, oil prices have been decreasing — in the past few months especially — making this industry less profitable for the country as it struggles to repay its debts amid its own crippling recession.