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CARACAS (Reuters) - Venezuelan state oil company PDVSA and Chevron Corp <CVX.N> plan to turn their joint venture Petropiar plant back into a crude upgrader, after months operating as a less complex blending facility, three people familiar with the operation said.
The companies plan to begin producing Hamaca-grade synthetic crude for export at the plant early next year, said the people, who spoke on condition of anonymity this week. Petropiar stopped producing Hamaca earlier this year and has been making heavier Merey crude, mostly for the Asian market, since July.
Petropiar once made up to 210,000 barrels-per-day (bpd) of Hamaca out of tar-like oil from the OPEC nation's Orinoco belt, one of the world's largest oil reserves. The extra-heavy crude needs to be either upgraded or blended with lighter grades at facilities near the Jose terminal before being exported.
But Petróleos de Venezuela, S.A., known as PDVSA, struggled to find markets for that grade after the United States, previously Venezuela's largest customer, slapped sanctions on the company in January in an effort to oust socialist President Nicolas Maduro, who has overseen a dramatic economic collapse and a freefall in crude output.
It was not immediately clear if PDVSA had a client lined up for the Hamaca crude.
PDVSA, which owns 70% of the joint venture and operates it, did not respond to a request for comment. Chevron deferred comment to Petropiar.
The Treasury Department last month renewed Chevron's license to continue operating Petropiar and its three other joint ventures with PDVSA despite the sanctions through January, the second such extension this year. The license had previously been set to expire on Oct. 25.
PDVSA said in July it expected Petropiar to produce some 130,000 bpd of Merey, but in September it was forced to suspend blending due to high crude inventories, as sanctions left the company with few willing buyers. It restarted operations in October and was producing around 100,000 bpd of Merey.
Exports surpassed 800,000 bpd for the second month in a row in October, helping to drain the inventory buildup.
(Reporting by Deisy Buitrago, Mircely Guanipa and Luc Cohen; Editing by David Gregorio and Richard Chang)