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The failure of Venezuelan oil production will accelerate after a massive power outage




The failure that collapsed in Venezuela caused confusion that will accelerate the collapse of its declining oil production, confronted with the US embargo, which will mean the loss of its main market, analysts estimate.

The horizon was already bleak before the massive power outage on March 7, when the free fall and the state oil company PDVSA failed and excluded US sanctions from the financial markets. The emergency situation began to be resolved on Monday.

The International Energy Agency (IEA) warned on Friday in Paris that the loss of barrels as a result of a power outage could affect the market supply, so it would be necessary to go to additional Saudi Arabia capacities.

In addition, since April 28, US citizens and companies will be banned from negotiating Venezuelan oil, a source of 96% of the country's largest black-gold income.

Although these sales are in a clear decline, it will blow into Washington's strategy of economically strangling the socialist government of Nicolás Maduro because they represent a 75% PDVSA cash flow.

Supplies to the United States fell from 1.3 million barrels a day in January 2011 to just 100,000 in the first half of March, according to the country's energy agency.

Maduro claims that the White House's sanctions against diplomatic relations in January cost Venezuela $ 30,000 million.

The recent paralysis has hit the weakened industry. "During the day of power outage, the barrel did not drop out (…). This situation is just the start of a major deteriorating cycle," Luis Oliveros, oil expert, told AFP.

According to secondary sources of the Organization of Petroleum Exporting Countries (OPEC), oil production in Venezuela fell again last February and according to secondary sources, the Organization of Petroleum Exporting Countries (OPEC) again decreased by more than a million barrels per day, which is 142,000 less than the January average.

Ten years ago, it was 3.2 million barrels a day.

After a power outage this year, it could drop to 500,000 barrels this year, economist Asdrúbal Oliveros, the director of Ecoanalítica, quoted Barclays, a London-based financial services firm, warned.

PDVSA did not balance the impact of the electrical failure, during which it merely announced that it met the internal gasoline supply when long lines were created at service stations. "We didn't stop the operation or stop!"

Three PDVSA tanks in Anzoategui (Northeast) flared on Thursday, which the government described as "terrorist action" by the United States in its offensive to get it out of power.

Wells in collapse

The IEA noted that "although there are indications that the situation is improving, the degradation of the electrical system is such that" it cannot ensure that "repairs are durable."

“In some cases, damage to the wells is irreversible and in others it is necessary to make a very strong investment in order to put these operations back into operation. The impact will be very hard, ”emphasizes Luis Oliveros.

The number of active wells has fallen sharply, with accusations of lack of research and maintenance investment and serious corruption cases.

According to oil service provider Baker Hughes, 26 platforms operated at the end of February, compared to 47 active flights. There were 74 in February 2014.

Maduro condemns that the massive electrical failure was caused by "cyber attacks" in Washington against the Guri hydro power plant (Bolivarian state, south), which generates 80% of the country's energy.

Several experts have rejected this version and believe that power outages – usually over the last decade – will continue to affect all economic sectors.


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