Venezuela: after six days without power, the black gold in the hole

Venezuela: après six jours sans courant, l'or noir dans le trou

The gigantic power outage that plunged Venezuela into the black will precipitate the collapse of oil production, already undermined by the crisis and the us sanctions that will soon lose its core market.

After six days without light and the pumping stopped, the horizon is more than dark for this resource essential to the economy of the country and the public company operating PDVSA, warn experts.

From 28 April, the citizens and companies in north american will be forbidden to buy or sell the crude in venezuela, which earns 96% of its revenues to the country, and whose reserves are the largest in the world.

Even if the exports were already in free fall, it is a bad blow, a estocade same, worn to the government of Nicolas Maduro as the United States provide 75% of the cash from PDSVA.

Maduro said that the sanctions of the United States, with whom diplomatic relations are broken off, have already cost the country $ 30 billion.

The paralysis that has just gone through Venezuela with the fault has yet impacted the sector weakened. “Not a single barrel is released for the duration of the outage… This situation makes that the kick-off of the deterioration much worse yet to come,” said to AFP the expert Luis Oliveros.

The crude production in venezuela has started his descent to the underworld in February of last year, which is stagnant around for a little over a million barrels per day, or 142.000 less than the average of the previous month, according to sources close to the Organization of the petroleum exporting countries (Opec).

Ten years ago exports amounted to 3.2 million barrels/day.

With the damage caused to the facilities by the outage, the volume could fall to 500,000 this year, warns the economist Asdrubal Oliveros, director of the Institute Ecoanalitica, on the basis of a report from Barclays, based in London.

PDVSA has not yet submitted the balance sheet of the outage. During the break, the company confined itself to announce that it would ensure the supply of gas to the interior of the country, when long queues began to form in front of service stations.

“We have not stopped operations and it’s not going to stop!”, has hammered the company as a slogan.

– Wells-stop

Wednesday evening, three tanks belonging to the company were burned in the State of Anzoategui (northeast): as for the crash, the government has accused the United States and the opposition, which would, according to him, sponsored a “terrorist action”.

Revive the closed-down facilities by the outage will not be easy because they will necessarily have suffered any damages, believes Luis Oliveros.

“In some cases, the damage to wells may be irreversible, in others, they will require heavy investment to become operational. But the consequences will be very severe”, he adds.

The number of wells actually function was already in free-fall, due to a lack of maintenance and investments denounced by the experts, as well as corruption.

According to the supplier of oilfield services Baker Hughes, 26 platforms were still working in the country at the end of February, compared with 47 a year earlier. And 74 in February 2014.

Maduro has accused a “cyber attack” against the main central part of the country have caused the failure of 7 march. But experts interviewed by AFP spoke of the frequency of outages in the country. “The infrastructure of the country are continuing to deteriorate,” notes Luis Oliveros.

– Asphyxia –

The administration of Donald Trump has frozen the funds and assets of PDVSA in the united States and those of CITGO, its subsidiary, entrust their control to the leader of the opposition, Juan Guaido that they have identified as an interim president, as well as a fifty countries.

As soon as the end of 2017, it had forbidden its citizens, and its companies have to negotiate new debt obligations of the country and PDVSA, which represented approximately 150,000 million dollars.

Mr. Trump loop is now totally in the loop by extending these measures to the partners of the company. According to the consulting firm, Eurasia Group, Washington wants to further extend these sanctions to third parties in order to “further undermines the financing” of the government of Maduro.

This week, the Treasury department has sanctioned a Russian bank, Evrofinance Mosnarbank, for having “assisted, sponsored or provided financial support, equipment or technology” to PDVSA.

At the same time to the production, deliveries to the United States have also decreased: according to the u.s. agency of Energy, they were at about 100,000 barrels/day during the first half, compared with 1.3 million in January 2011.