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HOUSTON/PUNTO FIJO, Venezuela (Reuters) - Venezuela's largest refining complex plans to lower operating rates in July to 42 percent of its 955,000-barrel-per-day capacity, a level that would require state-run oil company PDVSA to keep increasing fuel purchases, according to internal documents seen by Reuters.
Petroleos de Venezuela last week launched one of its largest offers on the open market in recent years to buy more than 6 million barrels of fuel and up to 9 million barrels of diluents for the second half of 2017.
Venezuela is suffering under triple-digit inflation and Soviet-style product shortages as its socialist economy unravels, and the tenders come as company known as PDVSA struggles to pay suppliers for previously imported cargoes, which in some cases have been waiting for months to discharge at Venezuelan ports.
PDVSA has few options to supply Venezuela's domestic market and feed some of its refining units other than importing what it has been unable to produce, according to the documents.
Venezuela's Paraguana Refining Center, which consists of the Amuay and Cardon refineries, will process only 405,000 bpd of crude in July due to maintenance and a lack of light oil and spare parts, according to the documents and a union leader.
The original plan for July was to process 437,000 bpd, or 46 percent of capacity, one of the document says, close to the rates registered in recent months.
The Amuay refinery is even proposing to process diluted crude - a blend of Venezuelan heavy oil and imported naphtha that is typically exported - to maintain operations, it adds.
"We don't have crude enough nor VGO (vacuum gas oil)," said Ivan Freites, a union leader from Paraguana. Almost all alkylation units in Venezuela are currently out of service and only two out of four catalytic crackers are working, he added, which is limiting production of finished fuels.
PDVSA did not answer to a request for comment. The firm last week said that Cardon's catalytic cracker resumed operations after reduced functioning.
Venezuela's Puerto la Cruz refinery has recently increased processing at its only active crude unit, but the facility is still working at around 20 percent of its 187,000-bpd capacity, said Jose Bodas, a union representative from that plant.
The country's smallest facility, the 146,000-bpd El Palito, is the only one functioning at its typical capacity, a worker said, but one of its alkylation units is also out of service.
At the 335,000-bpd Isla refinery in Curacao, used by PDVSA as an auxiliary facility, a crude distillation unit damaged in a fire last month has not yet been replaced, a source from that plant told Reuters.
Even though PDVSA has tried to avoid a repeat of the long lines seen at gas stations during a gasoline shortage in March, intermittent supply problems have occurred in recent weeks at some areas including oil-producing Zulia state.
Venezuela's crude production has been falling since 2011 due to insufficient investment and payment delays to oil services firms, affecting the output of medium and light crudes needed for refining and to dilute the OPEC-member country's extra heavy oil.
In one of the documents, a member of PDVSA's supply and trade team warns that a lack of crude could impact the July supply quota to India's refiner Reliance (RELI.NS).
"Cancelling two Boscan crude cargoes significantly impacts our obligation to export clients from (the terminal of) Bullenbay," the document says.
As of June 26, some 17 tankers were waiting in the Caribbean sea for authorization to discharge at PDVSA's terminals, according to Thomson Reuters vessel tracking data.
Payment delays to PDVSA's oil suppliers have been frequent in recent years, so most providers are now requesting to be paid before delivering any cargoes.
Reporting by Marianna Parraga in Houston and Mircely Guanipa in Punto Fijo, Venezuela; Additional reporting by Brian Ellsworth; Editing by Lisa Von Ahn and Marguerita Choy