Venezuela blackout cuts oil flow, mutes protests

Another prolonged blackout in Venezuela has paralyzed the oil industry and muted opposition calls for more anti-government protests.

The blackout started on 25 March, affecting up to 19 states including Anzoategui, where state-owned PdV´s heavy crude upgrading and blending operations and exports are halted. Production in the Orinoco heavy oil belt, the source of most Venezuelan crude output, is less than 100,000 b/d, down from around 700,000 b/d before the latest power cut, a senior PdV official told Argus.

The oil industry had not yet fully recovered from an earlier catastrophic power outage that started on 7 March and lasted for several days.

Technicians were struggling overnight to restore power when an auto-transformer at a 765kV substation in Bolivar state exploded before dawn today, two senior officials with state-owned utility Corpoelec told Argus.

The affected substation has three large-capacity auto-transformers. One of the two remaining auto-transformers still in service is operating below 50pc of its nominal load capacity, and the third is operating normally.

Today's blackout started at the same Guri substation where a brushfire on 25 March sparked a blackout that affected 20 states and the Caracas metropolitan area.

The 10GW Guri hydroelectric complex traditionally provides about three-quarters of Venezuela´s power supply.

Corpoelec yesterday managed to restore power to most of Caracas and nearby states such as Aragua, Carabobo, Miranda and Vargas but the service was short-lived.

Speaking at a modest opposition rally in Caracas today, Venezuelan opposition leader Juan Guaido called for more street protests on 30 March. Most Venezuelans could not hear or see his message because they have no electricity or internet service. The blackout has also cut off municipal water for many residents.

Guaido, who is recognized as Venezuela´s interim president by the US, Canada and most Latin American and EU countries, is seeking to force President Nicholas Maduro to step down.

In today´s remarks, Guaido said Japanese and German companies have offered to help Venezuela restore power, but these cannot be contracted until Venezuela is in a position to pay them. He said other power contractors have abandoned Venezuela because they were not paid.

Venezuela's executive vice president Delcy Rodriguez and her brother, communications minister Jorge Rodriguez, blamed the power outages on US-directed cyberattacks aimed at toppling the government.

Guaido´s wife, Fabiana Rosales, met with US President Donald Trump in the White House today. Trump told her that Washington is "with Venezuela 100pc" and warned that "Russia has to get out," an allusion to the weekend arrival in Caracas of 100 Russian military personnel.

The US administration still believes that its policy of using sanctions to force out Maduro will work, but it has begun to prepare for a much longer transition than it originally expected.

The US expects an additional 2mn refugees to leave Venezuela in the near future, US secretary of state Mike Pompeo said today. The White House budget request for fiscal year 2020 is asking to allocate up to $500mn for assistance to Venezuela — below the lowest estimates of the amount needed for the country's restoration but sufficient "where things stand today," Pompeo said. He said $6bn-$12bn would be required to help restore the Venezuelan economy over the next few years, once Maduro steps down.

Venezuelan economists put the reconstruction figure at $100bn or more.