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Venezuela refinery fire burns for third day

Venezuela's biggest refinery may not be able to restart production after gas explosion causes one of oil industry's worst accidents.

By Marianna Parraga and Sailu UrribarriReuters / August 27, 2012

In this photo provided by Miraflores Presidential Press Office, Venezuela's president Hugo Chavez, second from left, speaks with Venezuela's Vice President Elias Jaua, as Venezuela's Oil Minister and President of Petroleos de Venezuela Rafael Ramirez, left, stands during a visit to the Amuay refinery near Punto Fijo, Venezuela, Sunday. A huge explosion rocked Venezuela's biggest oil refinery early Saturday killing at least 39 people and injuring more than 80 in Venezuela's deadliest refinery blast ever.

Miraflores Presidential Office/AP

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PARAGUANA, Venezuela

A fire burned for a third day in two fuel storage tanks at Venezuela's biggest refinery on Monday, putting in doubt plans to quickly restart the facility after one of the worst accidents to hit the global oil industry for decades.

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Reuters reporters saw a thick column of dark smoke and flames leaping from the tanks at the 645,000 barrel-per-day facility. Officials say that if they fail to extinguish the blaze with foam, they will let it burn out by itself, which could take two or three days.

Energy Minister Rafael Ramirez told Reuters by telephone from the scene that fire crews had worked through the night and were continuing their efforts on Monday.

"The breeze is changing direction all the time so we have to move the firefighting crews to keep trying to extinguish the fire," Ramirez said. "Last night we had a fire truck trapped by the blaze, fortunately without any victims or damage. We will continue the same efforts today."

A gas leak caused an explosion and then a fire before dawn on Saturday at the facility, part of the world's second biggest refinery complex. Nearby homes were obliterated, at least 41 people killed and dozens more wounded.

Ramirez said on Saturday and Sunday that Amuay could restart in two days at most but he gave no further details on Monday.

State oil company PDVSA says none of Amuay's production units were affected and that Venezuela has enough stocks to meet its commitments to the domestic market and keep up exports.

President Hugo Chavez promised a full investigation into the tragedy during an emotional visit to the scene on Sunday.

The incident is likely to support global fuel prices that already are being pushed higher by worries that Tropical Storm Isaac could suspend U.S. oil production and hints of another round of monetary stimulus by the U.S. Federal Reserve.

UNION LEADER SLAMS MANAGERS

Ivan Freites, a union leader at the Paraguana complex, told Reuters it was not possible for the refinery to restart within two days of the blast, and accused officials of playing down the scale of the disaster.

"A refinery is not a coffee-maker," he said. "They don't understand the restart process. The managers are acting like political operatives ... not thinking of the victim's families."

Freites' union has been pushing PDVSA to improve safety standards at its installations, especially since 2010 when 95 workers were rescued from an exploration platform that sank in the Caribbean.

"This could have been avoided. They are trying to make it look like leaks are something normal, when there are lethal gas detectors in refineries ... and workers must carry detectors."

Ramirez told Reuters that PDVSA is considering seeking floating storage in the area - using tankers to store oil and refined fuel offshore while the company repairs the main tanks.

Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo, said the incident was expected to have an impact on markets.

"Oil product prices are expected to go up after the fire as they might likely look towards imports," he said.

One Singapore-based trader said prices had risen. "This is super bullish news for gasoline," the trader said.

Saturday's blast ranks as one of the most deadly oil industry accidents in recent history, nearing the toll of the 1997 fire at India's Visakhapatnam refinery that killed 56, and topping the 2005 Texas City refinery blast in the United States, which killed 15.

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