By Marianna Parraga
HOUSTON, April 1 (Reuters) - From Peru to Brazil, a rash of
unplanned outages at ports and pipelines and necessary
maintenance work at oilfields is taking a bite out of global
production, unexpectedly curbing a historic supply glut.
Even though the disruptions are individually small, taken
collectively they are helping slow an unprecedented global
build-up of surplus crude stockpiles estimated at 1.5 million
barrels per day (bpd) for the first half of 2016.
While likely short-lived, they could foreshadow a larger and
longer-lasting output decline from a region that, because of its
dependence on oil exports, is particularly vulnerable to the
damaging effects of prices under $40 a barrel.
"Latin America is among the world's most vulnerable oil
regions right now," said Robert Campbell from Energy Aspects.
"We are expecting an exports decline of at least 100,000 barrels
per day in the second quarter and possibly as much as 200,000
bpd compared with the same period of 2015."
Venezuela, the largest exporter in a region that pumps about
a tenth of the world's oil, is suffering from selling its
barrels at near break-even prices, even as equipment failures
have hurt its crude upgrading and delayed loading and discharge
at its main oil port.
In March, state-run PDVSA's crude exports from Venezuela and
Curacao including oil and diluents re-exported as blends
declined almost 300,000 bpd from a year earlier to 1.64 million
bpd, according to preliminary data from Thomson Reuters Trade
Flows.
"The situation at Jose port is starting to affect crude
flows as some companies are not willing to bear demurrage costs.
A largest effect of this delay could be seen in April," said a
trader from a firm producing crude at Venezuela's Orinoco belt.
PDVSA, which has said its exports are at normal levels, did
not respond to requests for comment.
Energy Aspects has forecast a production decline at some
Brazilian fields, which would keep exports flat while more
maintenance projects are done after state-run Petrobras
PETR4.SA and private operators postponed some in 2015.
In Latin America's smaller producing countries, where
infrastructure disturbances are frequent, concerns have also
emerged about oil shipments.
Colombia, whose production stopped increasing in 2014 after
eight years of growth, has not been able to get rid of endemic
violence afflicting transportation infrastructure.
A rebel attack shut the 200,000-bpd Caño Limon-Covenas
pipeline, forcing state-run Ecopetrol ECO.CN to declare force
majeure on three shipments in March.
In Peru, another out-of-service crude pipeline is preventing
exports by one if its main private operators, Pacific
Exploration & Production PRE.TO , which produces some 12,000
bpd of heavy crude in the Andean country.
The small line is scheduled to resume in two months. In the
meantime, Pacific's output declined 55 percent in February from
the previous month, and no production was reported in March.
In Panama, weather conditions have been limiting traffic at
the Panama Canal, where most small to medium tankers pass to
load and unload crude in the Americas. This could create a
bottleneck, restricting Latin America's crude flows in the
coming months.
NO QUICK FIX
Even as producers recover from these glitches, they face
gloomy prospects. In real terms, Latin America has had the
biggest decline in active oil drilling outside the United
States, according to Baker Hughes monthly rig data
RIG-OL-LAM-BHI .
The number of rigs has fallen 40 pct in two years to just
237 in February, its lowest since late 2005. Other regions like
Europe and Africa have had declines too, but had far fewer rigs
to begin with.
Latin America's output decreased to 9.52 million bpd last
year, according to official figures from the six largest
producing countries. Only Brazil showed a significant increase,
offset by declines in the rest of the region, especially in
Mexico.
Colombia's production has fallen 5 percent or 52,000 bpd day
since September to 955,000 bpd in February, according to
official data, due to a combination of budget cuts and frequent
disturbances to transportation infrastructure.
Analysts expect the region's two largest exporters,
Venezuelan and Mexico, to be particularly strained by worsening
cash-flow woes, likely deepening the 250,000 bpd (4.5 percent)
decline in output they registered last year.
Mexico's Pemex recently said an additional fall of 100,000
bpd will come due to more than $5 billion in budget cuts this
year. But firms including Wood Mackenzie and Medley Global
Advisors expect a bigger decrease as rig count is at historical
lows and private operators do not expect to start drilling soon.
Mexican "President Peña Nieto wanted an output increase by
the end of his term, but even though Pemex had originally
forecasted a production of 3 million bpd for 2018, to reach that
point in time with an output of 2 million bpd is now considered
a good scenario," said Pablo Medina from Wood Mackenzie at a
Platts conference this month in Houston.
Venezuela's rig situation is not as critical as its
neighbors. Still, analysts expect PDVSA's output will be hit
this year by cash flow problems, a shortage of spare parts,
growing crime affecting the oil industry and a brain drain due
to low salaries.
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Petroperu expects crude oil pipeline to resume flow in 65 days
Colombia's Ecopetrol declares force majeure on 3 shipments
Panama canal sets depth limit on ships due to drought
Delays at Venezuela's main crude port trigger vessels backlog
Pemex sees production drop of 100,000 bpd with budget cuts
GRAPHIC- Latin America active rig counts plummet http://tmsnrt.rs/1Uvcmyh
IEA says oil market may "drown in oversupply" in 2016
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