VENEZUELA - The Local Refineries & Marketing Operations.

There are six oil refineries in Venezuela, all owned and run by PDVSA which has the lion's share of the domestic market.

As a result of a restructuring process in late 1997, PDVSA had from early 1998 to the first quarter of 1999 made major savings in its domestic refineries and marketing operations (see background in Vols. 57 and 61). PDVSA's 20-year supply monopoly ended in 1997 when Congress passed a law allowing foreign companies and private Venezuelan firms to market oil products in the country. BP, Mobil (now part of ExxonMobil), Shell, Texaco (now part of Chevron) and other majors joined the country's oil retail market, together with Venezuelan firms. But the governments then and under Chavez have retained the pricing of domestic petroleum products.

The situation took a negative turn for PDVSA's competitors with the coming to office of President Chavez in February 1999. The foreign companies have since limited their retail operations, worried that the Chavez government will keep the local oil market regulated and fuel prices heavily subsidised. Prices of natural gas being supplied to the domestic market are also heavily subsidised, with PDVSA paying the producers, Repsol/YPF and a consortium led by Total, 80% above the local gas price.

Apart from the upgrades at the Amuay, Cardon and Puerto La Cruz refineries, two expansions completed in 1996 were the following: the inter-connection of the Amuay and Cardon plants, both located on the Paraguana peninsula in the state of Falcon; and the setting up of a catalytic distillation unit at El Palito refinery, with technology developed by PDVSA's research unit Intevep.

The linkage of Amuay and Cardon was done to optimise the product mix at both complexes, in order to produce higher quality fuels and chemicals and generate added revenues of $80m/year. The El Palito expansion boosted production of methyl-tertiary-butyl-ether (MTBE), ter-amyl-methyl-ether (TAME) and high octane components needed to reformulate gasolines for export.

Due to plans to phase out MTBE in the US, Super Octanos in late 2000 began considering a shift of its 500,000 t/y of MTBE production to iso-octane, another gasoline additive.

Deltaven is PDVSA's local oil marketing subsidiary. Set up in July 1996, Deltaven was created in order to modernise the image of state retailing. Until the latest restructuring process, Deltaven unified the domestic marketing strategies of the then integrated PDVSA operators Lagoven, Maraven and Corpoven. These three companies were merged into PDVSA's new system in late 1998.

Deltaven has improved many of the 1,580 petrol stations it took from the three operators and now its network exceeds 1,600 stations. It markets around 100 products under the PDV brand name and logo, including engine and aviation gasolines, jet kerosine, diesel, fuel oil, lubricants and greases, additives, brake fluid, asphalt and bunker fuel. These products are also marketed under the PDV brand name elsewhere in Latin America.

On Oct. 1, 1999, Deltaven began supplying the market with lead-free gasoline through hundreds of PDV service stations in the country's main urban centres. These have been fitted out to supply new fuels across the country.

The unleaded gasoline has self-cleaning characteristics, advertised nation-wide by Deltaven. By using it, Deltaven says, consumers do not only obtain the benefit of a gasoline which protects their environment, but their cars as well - "all thanks to new-generation detergent additives that are used exclusively on all types of PDV gasoline".

One of main advantages of this "exclusive PDV feature" is that, by keeping the fuel system clean, it helps protect injectors, filters and other engine parts. To help clients spot the gasoline outlets, allocated stations have been clearly identified with green signs - the same colour used to identify the bays and pumps carrying the unleaded fuel. Even nozzles on pumps are green.