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Caribbean-Latin America
Venezuelan refinery explosion: higher oil prices?
2005-04-07
From Refinery Explosions to Corruption. The new look of Venezuela's Oil Industry.
By Gustavo Coronel

07.04.05 | At 6:00 AM Sunday morning, April 3rd, a potent explosion shook the refinery of Amuay, in the Venezuelan Paraguana peninsula. The explosion occurred in an electrical substation of the refinery and took no lives. This was, in itself, a miracle, as street vendors who try to sell food and all other kinds of goods to the workers of the refinery now closely surround the installations. Fortunately it was still too early for them to be around. Venezuelan friends tell me that, today, the areas near the entrances to this refinery look like a Persian market of the old tales, full of street vendors of every conceivable item. It was not like this before the "revolution."

The newspapers talk about a failure of the electrical system that feeds the steam boilers in a section of the refinery. This failure, in turn, affected all the industrial services to the refinery: steam production, water, and electric energy, leading to an interruption of the whole complex. The brief official statement by the management of the refinery claims that an emergency plan was immediately activated that led to the re-establishment of the operations but observers say installations are not back to normal. Staff from a contractor firm doing work nearby said that the accident took place while the major maintenance of the flexi Coker (reduces viscosity and metal content of heavy oils) was in progress. Instantly the refinery area filled with smoke, adding to the sensation of great danger among the population living nearby.

The rumors started to fly, in absence of a detailed explanation from the company. The Chävez controlled, local newspaper Nuevo Día, spoke of an explosion due to sabotage by the opposition. The blame started to be placed, as always, on the contractors and/or the former managers of the refinery. The truth is that this mishap is not the first one in Venezuelan refineries after the Chävez takeover: The El Palito refinery has had major problems in the recent past with loss of human lives. Only two weeks ago another fire broke out in the Amuay refinery. The deterioration in the quality of the managerial and the technical staff due to the politicization of the company has taken the company to very low levels of maintenance and operational reliability.
Posted by:TMH

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