An explosion tore through Venezuela's biggest oil refinery on Saturday, killing at least 26 people, wounding more than 50 and halting the facility's operations in the Opec nation's worst industrial accident in recent memory. Energy Minister Rafael Ramirez told Reuters that none of the production units at the Amuay refinery were affected and that there were no plans to halt exports, a sign that the incident will likely have little impact on fuel prices.
Venezuelan state TV showed footage of flames and billowing clouds of smoke coming from storage tanks at the 645,000 barrel-per-day (bpd) facility. The blast, triggered by a gas leak at 1:15 am (0645 GMT), damaged nearby homes and officials said a 10-year-old child was among the dead.
Most of those killed were National Guard troops who were providing security for the refinery, Ramirez said, adding that the fire was under control. "There was a National Guard barracks near the explosion ... the installation was too close to the operations," Ramirez told Reuters in a telephone interview, adding that operations could resume at Amuay within two days at most. "We need to boost production at other refineries and look for floating storage near the complex."
The incident follows repeated accidents and outages across installations run by state oil company PDVSA during the last decade that have limited output and crimped expansion plans. Amuay has partially shut operations at least twice this year due to a small fire and a fault in a cooling unit. Those problems have spurred accusations of inept management by the government of President Hugo Chavez, who is running for re-election on October 7.
Acrimony over the explosion could spill over into an already bitter campaign, but it is unlikely to overtake larger political concerns such as crime and the economy. "I want to convey the deepest pain that I've felt in my heart and soul since I started to get information about this tragedy," Chavez said in call to state television. He declared three days of mourning.
Venezuela has traditionally been a big supplier of fuel to the United States and the Caribbean, but refinery shutdowns have become so common that they rarely affect market prices. One trader told Reuters all the docks at the refinery were shut, and that tankers were anchored offshore waiting. He said this would likely cause delays to some Venezuelan exports.
The explosion broke windows at homes in the area, a peninsula in the Caribbean sea in western Venezuela, as well as at Amuay's main administrative building. Ramirez said a fire that broke out after the blast was under control had only affected nine storage tanks holding mostly crude oil and some processed fuels including naphtha.
One tank holding naphtha was still on fire, he said. A Reuters witness at the site said black smoke was still pouting out of that tank. Existing fuel stocks around the country were sufficient to guarantee 10 days of exports and local consumption, Ramirez said. PDVSA has no plans to invoke force majeure, which lets oil companies stop shipments due to accidents or extreme weather.
Amuay, together with a neighbouring facility, forms part of the Paraguana Refining Centre, the second-biggest refinery complex in the world with an overall capacity of 955,000 bpd. In 2010, there was a massive fire at a PDVSA fuel terminal on the Caribbean island of Bonaire, then a blaze at a dock at the Paraguana complex that halted shipping for four days. Also in 2010, a natural gas exploration rig, the Aban Pearl, sank in the Caribbean. All 95 workers were rescued safely.