Bit of a thread necro, but it be a good thread nevertheless. New news via Bloomberg:
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By Fabiola Zerpa
and Peter Millard
September 11, 2020, 11:56 AM EDT
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Venezuela’s capacity to produce some much-needed gasoline and diesel of its own hinges on a single oil play. To tap it, the Nicolas Maduro regime is willing to cannibalize the country’s crumbling energy infrastructure to pay contractors with scrap metal.

Unlike the tar-like crude from Venezuela’s Orinoco region, the light oil from Monagas state is the only kind that’s easy to process into fuel at the country’s aging refineries. It’s also the only area where production doesn’t require the help of sanction-wary partners.

So, with the U.S. considering further steps to curb the country’s fuel imports, cash-strapped state producer Petroleos de Venezuela SA is offering to pay for major repairs at pumping stations and compression plants in Monagas with scrap metal and parts from idled oil facilities, people familiar with the situation said, asking not to be named because the information isn’t public.

The move follows failed attempts to obtain $800 million in financing from suppliers, payable with crude and fuel, the people said. PDVSA is still offering to pay in crude or fuel, they said, but sanctions complicate such transactions and nothing has been decided.

The country so far has relied on shipments from Iran to ease a fuel shortage that often forces Venezuelans to queue for hours and even days to fill up, with many gas stations in Caracas shutting or rationing fuel.

The prospect of worsening shortages, increasing international isolation and growing social unrest has PDVSA grappling to revive a refining network crippled by years of mismanagement and pillage by criminal gangs. Boosting production and processing of light crude from Monagas is the country’s best shot at securing some measure of domestic fuel supplies.