A prolonged power blackout has given Venezuela’s oil export volumes yet another hit. The nation’s exports have been in decline for years due to underinvestment and failing infrastructure, but the loss of power means that state oil company PDVSA cannot operate its main oil loading terminal, the Jose Oil Port, according to Reuters.
Wellheads, upgrading plants and other petroleum infrastructure are also dealing with a loss of power, and Bloomberg reports that production has halted in some areas. The partial shutdown may have brought total output as low as 500,000 barrels per day, down from about 1.5 million bpd last year and 2.5 million bpd in 2014.
Venezuela is already dealing with American sanctions on its oil exports, which prohibit U.S. companies like PDVSA-owned Citgo from paying PDVSA directly for crude. There is a carveout for payments into a secured account, inaccessible to PDVSA and reserved for the use of a future Venezuelan government. However, reports indicate that several oil buyers are attempting to return previously-ordered crude because they cannot make acceptable payment arrangements.
In a statement, PDVSA denied any difficulties. «We continue to work to ensure the efficient supply to the whole country, our inventories remain stable, we refute any shortage information,» the company said in a social media update.
The government of Venezuelan president Nicolas Maduro blames the United States for the blackouts, alleging that U.S. operatives have sabotaged the Guri hydroelectric plant via cyberattack. However, independent experts suggest that it is a power transmission system failure, and that Venezuela simply lacks the resources to maintain its grid.
The long-term outlook for Venezuelan production is not positive. According to consultancy Fitch Solutions, it would take Venezuela’s oil sector at least a decade to recover to previous levels, and only then with assistance from international oil companies, which have the resources and expertise to bring its fields back to life.