Power failures that kept Venezuela in darkness for much of March also briefly slashed the country’s crude production by 50%, people familiar with the situation told Bloomberg.
Rolling blackouts across much of the country that started on March 7 temporarily paralyzed most of the country’s oil industry, Kallanish Energy finds. Oil output averaged less than 600,000 barrels a day during the blackouts, the people, who requested anonymity, told Bloomberg.
For all of March, production was 890,000 Bpd, according to a Bloomberg survey of officials, analysts and ship-tracking data.
The loss of production due to the blackouts dealt another blow to Venezuela’s already-crippled oil industry, reeling from years of mismanagement and U.S. sanctions that shelved its biggest customer.
The nation’s crude output, one of the few sources of cash for the regime of President Nicolas Maduro, has dropped by two-thirds since before Pdvsa workers went on strike 16 years ago.
Near the Orinoco Basin in eastern Venezuela, where four out of every five barrels is pumped, tar-like oil has begun to clog pipelines and tanks after the heating system lost power, Wills Rangel, a former Pdvsa board director and president of the United Workers Federation of Oil, Gas and Related Derivatives of Venezuela, told Bloomberg. Cleaning or removing the pipes could take months, he said.
The Orinoco Belt area hasn’t recovered fully from the electricity blow and is currently producing roughly 300,000 barrels a day, according to Rangel.
While pumping crude from fields in the Orinoco Belt requires some electricity, the bigger power demand comes from upgraders — facilities that convert the extra-heavy oil to lighter blends — located some 300 kilometers (186 miles) away, in the northern part of the country, near the coast. The country’s four upgraders are still in the process of being restarted.
“If Pdvsa restores power to all four upgraders, jointly owned by Chevron, Total, Equinor and Rosneft, it can have an impact on the national grid,” Rangel said.
Upgraders will only have total power once the state-run utility allows it, Rangel said. The flow of electricity from the national power grid must be stabilized before it can bring power back to other high-demand services such Caracas’s subway and water pumping systems.
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