Fire points to Venezuela oil industry woes

Aug. 31, 2012 at 7:20 AM
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CARACAS, Venezuela, Aug. 31 (UPI) -- Venezuela's biggest oil refinery remained closed Friday after firefighters put out a fire that raged for more three days following an explosion that killed at least 48 people, left dozens wounded and hundreds homeless.

Venezuelan President Hugo Chavez, seeking re-election in October, announced cash relief for bereaved families and home-owners in the affected area but contested reports the fire was the result of years of neglect and poor maintenance.

In Washington, U.S. State Department spokesman Patrick Ventrell expressed sympathy for the victims and offered Venezuela assistance with clearing the aftermath.

"Our condolences go out" to the families and friends of those deceased, Ventrell said. "The United States would consider any requests for assistance to Venezuela if and when they are made. But they have not, at this time, yet requested any assistance."

Ventrell expressed "our heartfelt sympathy to the victims of that explosion."

Venezuela's energy industry has gone through several state takeovers and resulting personnel shake-ups. An independent report earlier this year warned of a serious lack of maintenance at the Amuay refinery, part of the Paraguana Refinery Complex, about 230 miles west of Caracas. The complex had a capacity, until the fire last Saturday, of refining 645,000 barrels of oil per day.

Opposition and industry critics said government pledges the refinery could restart this week were optimistic, as the causes of the explosion and fire remain unclear. Witnesses reported seeing flames in the wrecked facility hours after officials said the fire had been put out.

Cooling of the burned installations could take a day or two, analysts said.

A March report by the RJG Risk Engineering of London and circulated by CNN cited dangers posed by lack of maintenance at the refinery. The report also indicated about 100 fires at the complex in 2011. Critics say there is little record of those fires in Venezuelan media.

State energy company PDVSA said its exports of oil and petroleum products from Amuay's dock weren't affected. PDVSA didn't say if the present level of exports could be maintained after a week of disruption at the refinery.

Oil Minister Rafael Ramirez said Venezuela has "sufficient storage" and there's no need to reactivate refinery operations until its installations have been fully checked.

Paraguana refining complex head Jesus Luongo told state television resumption of refinery works could take two to three days.

Initial reports said only nine of 686 storage tanks at the giant complex were affected.

Ramirez said Venezuela has stockpiles of 4.2 million barrels of gasoline and other petroleum products and continues to produce 735,000 barrels of the motor fuel a day at plants, including nearby Cardon.

Current storage gave Venezuela about 10 days inventory, said the minister.

Industry analysts said the fires, the most lethal industry accident in Venezuela's history, compounded infrastructural problems that have caused discontent. Drought and electricity blackouts disrupted business, industry and society through most of the past three years and are seen behind Venezuela's continuing battle to wrest the economy out of recession.

Independent findings on the industry cited by the RJG Risk Engineering of London said Venezuela had lagged in routine maintenance of its oil installations since 2009 and had been resorting to reactive repair and maintenance more recently before the refinery blaze.

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