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Energy blackouts cut Venezuela Mar oil output

 


 

By Argus

CARACAS
Petroleumworld 04 04 2019

Venezuela´s oil operations are nearly all suspended again this week amid chronic blackouts that prompted president Nicolas Maduro to announce nationwide rationing in April.

According to preliminary internal estimates from state-owned PDVSA (PdV), March average crude production could be as low as 500,000 b/d, half of the February average, factoring in multiple days of shut-in output because of the collapse of the power grid on which the national oil industry relies.

The Opec country had been producing around 1.2mn b/d in January before the US imposed oil sanctions on 28 January. The sanctions forced PdV and its partners to start holding back some output to cope with a resulting export backlog, a shortage of naphtha to dilute their heavy crude, and storage constraints.

When the first catastrophic blackout hit on 7 March, Venezuela's already debilitated oil operations were dealt another blow with unplanned shutdowns at the Jose complex, where PdV and its foreign partners upgrade and blend Orinoco heavy crude for export. The Jose operations were briefly restarted in mid-March, but they were forced down again when another blackout swept the country on 25 March, and repeatedly since then on transformer failures. Power supply across Venezuela is now intermittent at best.

The three PdV-led operational upgraders PetroPiar with Chevron, PetroMonagas with Rosneft, and PetroCedeno with Total and Equinor are suspended because of safety and equipment risks.

"We are very concerned about safety, and stopping and starting are the times of greatest risk," an executive with one of the upgrading projects told Argus , suggesting that the plant is likely to be mothballed for the timebeing.

PdV´s Sinovensa heavy crude blending plant that is effectively operated by Chinese state-owned partner CNPC has managed to eke out more production thanks to limited independent power supply. Back-up generators at the upgraders are out of service, forcing them to rely on the grid.

In a national televised address yesterday, Maduro announced 30 days of rationing to recover from what his government says is repeated sabotage of the grid.

State-owned utility Corpoelec will ration electricity nationwide in rolling blocks during April while it repairs structural damage.

And in an announcement late this afternoon, Maduro named Igor Gavidia as the new electricity minister and chief executive of Corpoelec, replacing Luis Motta. Gavidia previously served as vice minister of the electricity portfolio.

Corpoelec officials said privately that the blackouts originated with a brushfire that triggered the first catastrophic blackout on 7 March, cutting off supply from the 10GW Guri hydroelectric complex that accounts for about 80pc of supply. Multiple transformer explosions followed as Corpoelec tried to restore power, leading to the string of outages that began on 25 March.

"We are in a very serious situation," Maduro said. "The attacks were directed against Guri's generation system."

He blamed "electromagnetic attacks" perpetrated by clandestine US forces for up to five national blackouts last month, including three blackouts registered within a 72-hour period last week.

Millions of Venezuelans could not see or hear Maduro's address because of another blackout yesterday, the fifth in a 24-day period last month.

Currently "only 6GW or 17.5pc of Corpoelec's nationwide generation capacity of 34GW is operational," a senior Corpoelec official at the company's Caracas headquarters said. He pointed to "years of inadequate maintenance and bad management by unqualified managers."

According to Maduro´s rival in the opposition, Juan Guaido, 14 of Venezuela´s 23 states are still without power today. Most also lack associated municipal water supply.

Three senior Corpoelec officials tell Argus that the government´s rationing plan will not be enough to restore electricity.

The brushfire and transformer explosions destroyed most of Guri's main substation and downed the 765kV transmission lines on which Venezuela depends for the bulk of its electricity supply. Rebuilding the substation could take months, a Guri-based Corpoelec official said. Thermal power plants that would normally kick in when hydro dispatch is unavailable are out of service or lack feedstock to operate.

Venezuela's grid "has finally collapsed completely," the Corpoelec official said. "The entire country including most of the oil industry depended on Guri for electricity. We will suffer in darkness for years thanks to the incompetence and corruption of the Maduro government."

Maduro pledged that power would be restored by May, but a Corpoelec worker and board member of national electricity union Fetraelec says Corpoelec no longer has the skilled workers, repair equipment and parts needed to carry out even minimal repairs at Guri.

"Almost 30,000 skilled Corpoelec technicians have left the company since 2017 and their replacements are unskilled political hires," the board member said.

 

 


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