August 30, 2012:

Paz Oil, Israel's largest distributor of refined oil products, reported a 70 percent rise in quarterly profit, boosted by improved refinery margins and efficiency measures. Paz on Thursday said it earned 73 million shekels ($18 million) in the second quarter, compared with 43 million in the year-earlier period. Revenue rose 10 percent to 5.18 billion shekels. "The improvement in refinery margins and the strengthening of the U.S. dollar improved operating profits despite the increase on energy expenditures and the cogeneration power plant's low utilization level, due to the shortage in natural gas in Israel," said CEO Yona Fogel. Paz said its profitability was helped by its convenience stores and cost cutting steps, such as cancelling discounts and reducing customer credit.

By Reuters

August 30, 2012:

CARACAS, Venezuela — The deadly blast and fire at Venezuela’s biggest refinery are prompting critics to question whether the state oil company has been neglecting maintenance while helping fund government programs under President Hugo Chavez. Analysts say the disaster at the Amuay refinery could also mean a financial hit for state-run Petroleos de Venezuela SA by forcing it to further increase imports of fuel for domestic.  The refinery remained shut down Wednesday, a day after firefighters put out the last of the blazes that had raged in fuel tanks since the explosion early Saturday. Prosecutor General Luisa Ortega said the death toll had been raised to at least 42 and eight people are reported missing. In recent years, Chavez’s government has increasingly used a share of earnings from the state oil company, known as PDVSA, to bankroll social programs known as “missions.” Its contributions to such programs rose from less than $1.6 billion in 2004 to $10.4 billion last year. The government’s pressure on the company to generate funds for programs that shore up Chavez’s support has led to a “deterioration that PDVSA has had in its refining activities,” said Asdrubal Oliveros, an economist and director of the consulting firm Ecoanalitica.

He said the state oil company has concentrated bigger investments in oil production to prevent output from slumping “but has neglected other activities, among them refining.” The Venezuelan press this week has reported on details of a PDVSA annual report that acknowledges difficulties and delays in maintenance work on refineries. Oliveros and other oil industry experts say insufficient maintenance has made disasters likelier, and they also argue that management has worsened in recent years. Government officials counter that PDVSA has invested $6 billion in maintaining refineries during the past five years. The company’s earnings have increased with higher oil prices in the past couple of years, but its debt has also risen, reaching more than $34.8 billion last year. It remains unclear how much money the disaster may cost PDVSA. “That is evidently going to generate bigger supply problems in the country than those that already exist,” said oil expert Juan Carlos Sosa, who heads the Venezuelan consulting company Petroleo YV. He said he expects the refinery shutdown will lead to increased fuel imports, meaning more government spending on fuel at international prices. Sosa said rising imports of gasoline and other refined fuels even before the disaster reflected problems at Venezuelan refineries that have prevented them from keeping up with demand.

In the first half of this year, fuel imports by PDVSA reached $4.9 billion, up 86 percent from the $2.6 billion in imports during the same period last year, according to official figures. That included 54,000 barrels of gasoline per day that Venezuela imported from the U.S. in April, the last month for which figures were available. That monthly average was 38 percent higher than what Venezuela was buying from the U.S. during the same month last year, according to the U.S. Energy Information Administration. Sosa and other analysts say Venezuela has been importing more fuel in recent years both because people are using more and because refineries aren’t keeping up. Sosa said that’s partly due to maintenance problems. In other countries, such a refinery disaster would likely bring higher costs at the pump for customers. But Venezuela has for decades offered its citizens highly subsidized gasoline at the cheapest prices in the world: about 9 U.S. cents per gallon (2 U.S. cents per liter). Oil Minister Rafael Ramirez has said Venezuela has plenty of fuel on hand to meet domestic demand in the aftermath of the disaster and won’t have to increase imports, but he has not discussed the possible financial impacts for the state oil company. Ramirez said a gas leak led to the explosion. The precise causes are under investigation.

As for the government’s response to the gas leak, there are unanswered questions, said Javier Larranaga, a fomer manager at the refinery complex who was fired in 2003 along with thousands of others from PDVSA for supporting an anti-Chavez strike. Larranaga said the Paraguana Refining Center, which includes the Amuay refinery, had a safety plan to rapidly evacuate workers and nearby neighborhoods in such an incident. He said he doesn’t understand why, after the gas leak was detected, about an hour passed before the explosion and still no one ordered an evacuation of surrounding areas. Larranaga also said the refinery is equipped with a system that in the event of a gas leak can produce a “water smoke screen” to prevent the gas from spreading and allow time for people to be evacuated. “The control system and emergency response wasn’t activated, or was activated and didn’t work,” he said.

By The Washington Post

August 30, 2012:

HOUSTON, Aug 29 (Reuters) - Hurricane Isaac continued to batter the Gulf Coast on Wednesday, causing flooding in Southern Louisiana but no discernible damage to refineries. The storm's passage left offshore oil and gas platforms largely unscathed. Isaac, currently a Category 1 hurricane, was centered 40 miles (70 km) southwest of New Orleans as of 9:00 a.m. (1300 GMT), provoking a dangerous storm surge and pelting coastal Louisiana with heavy rain that could prompt flooding through the day, the National Hurricane Center said. Louisiana's Plaquemines Parish reported flooding after storm waters flowed over a levee designed to protect the area. The 247,000-barrel-per-day Phillips 66 Alliance refinery, which is located in the parish, reported no damage, but had shut down to brace for the storm. Isaac lingered on the Gulf Coast, packing winds up to 80 miles (130 km) per hour and raising the specter of further flooding. But the storm's passage left the Gulf's offshore oil and gas platforms without reported damages, which could allow production to restart in coming days following sharp cuts in recent days as oil firms evacuated them.

The flooding in coastal Plaquemines "is horrible for the people there, but I do not think this affects any oil and gas infrastructure," said Kenneth Medlock, an energy expert at Rice University's Baker Institute in Houston.  "The rigs offshore should be up in about a week," Medlock said. "The offshore facilities should be OK with regard to major damage ... I would not expect a prolonged production outage." Offshore production in the U.S. Gulf of Mexico, which accounts for nearly one-fourth of domestic oil production and 7 percent of the nation's natural gas output, was largely shut down in recent days as crews evacuated rigs to brace for Isaac. U.S. government figures showed 93 percent of offshore Gulf oil and around two-thirds of gas output offline as of Tuesday. Early Wednesday, U.S. oil futures fell by 1 percent to $95.40 a barrel. U.S. gasoline futures were down 0.2 percent as many traders bet that Isaac would not cause major damage to regional refineries. "It is expected that oil production in the Gulf of Mexico will quickly return to normal," said oil analyst Carsten Fritsch of Commerzbank in Frankfurt. Initial reports on refinery operations in Louisiana did not indicate damage to plants, although energy analysts said that could remain a concern through Wednesday.

Emergency management officials in Garyville, Louisiana, said there were no reports of flooding or damage at Marathon Petroleum Corp's 490,000 bpd refinery. Louisiana typically processes around 3 million bpd in its plants, many of which are located in low-lying areas near the coast. The broader Gulf Coast region is home to a refining hub with 7.8 million bpd capacity, or 45 percent of the U.S. total. As of Tuesday afternoon, about 12 percent, or 936,000 bpd, of Gulf Coast refining capacity was closed down due to Isaac, the U.S. Department of Energy said.

By Reuters

August 30, 2012:

The explosion at Venezuela's Amuay refinery last weekend killed 42 people, wounded 132 others and left eight people missing, Attorney General Luisa Ortega Diaz said. We have "42 dead victims, of whom 41 have been identified," whose bodies have been released to relatives, Ortega Diaz told Venezolana de Television, or VTV. Prosecutors have received "reports of eight people missing" in the explosion and fire at the energy complex, the AG said. "Of the 132 injured people, only 20 remain hospitalized because the rest had only slight injuries," Ortega Diaz said. The Amuay refinery, one of the three in the Paraguana Refinery Complex, or CRP, was rocked by an explosion last Saturday that started a fire and damaged about 500 nearby buildings. The blast started a fire that burned for four days and affected nine fuel tanks at the facility. Eighteen National Guard members died in the accident at the complex, which has a base and housing for guardsmen, Vice President Elias Jaua said over the weekend.

The investigation being conducted by the Attorney General's Office, the CICPC criminal investigations agency, the Sebin police intelligence agency and Petroleos de Venezuela, or PDVSA, specialists will "take the time needed," Ortega Diaz said. The attorney general refused to speculate about the cause of the blast, saying that to do so would be "irresponsible" on her part. The investigation will be "impartial, objective and impeccable," and it will "determine the truth," the AG said.

By Fox News

August 30, 2012:

The Organization of Petroleum Exporting Countries will trim crude exports by about 1 percent this month as refiners in the U.S. and Europe halt plants for maintenance, according to Oil Movements. OPEC, responsible for about 40 percent of the world’s oil supplies, will export 23.82 million barrels a day in the four weeks to Sept. 15, compared with 24.03 million a month earlier, the tanker-tracker said today in its weekly e-mailed report. The data exclude Angola and Ecuador. “Sailings are declining because we’re at the end of the summer season,” Roy Mason, the researcher’s founder, said today by telephone from Halifax, England. “The crude that will be loaded up until the end of next month will be arriving in the maintenance season.” Exports from OPEC are falling less the seasonal norm, reflecting strong demand in the U.S. and Europe, he said. Brent crude rallied more than 7 percent this month to trade at $113.09 a barrel on the ICE Futures Europe exchange today in London. “The message from prices is that prompt oil is scarce,” Mason said.

Shipments from the Middle East, including non-OPEC members Oman and Yemen, will fall by 1.2 percent to 17.46 million barrels a day in the four-week period, the report showed. Oil on board tankers will average 479 million barrels, down 4.1 percent from 499 million in the month to Aug. 18, the researcher said. Oil Movements calculates the volumes by tallying tanker-rental agreements. Its figures exclude oil held on board vessels used as floating storage. OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The group plans to meet next on Dec. 12.

By Reuters