(Bloomberg) -- Chevron Corp.’s largest producing joint venture with Venezuela is still struggling to resume normal operations after rolling blackouts temporarily knocked oil output to zero.
Production at Petropiar, an oil upgrader jointly owned by Chevron and state-owned Petroleos de Venezuela SA, fell by half from February to March as the government rationed electricity in the Orinoco Belt, according to data compiled by Bloomberg from company sources. During the first two weeks of April, production averaged 74,000 barrels a day, about 44 percent below the same period in January.
Petropiar’s slump highlights the plight of Venezuela’s other joint ventures with international oil companies, which have taken a hit in recent months as U.S. sanctions fuel brain drain and nationwide power outages shut in oil fields. PDVSA partnerships -- with Total SA and Equinor ASA on the Petrocedeno upgrader, with CNPC on the Sinovensa project, and with Rosneft Oil Co. PJSC on the Petromonagas upgrader -- have yet to resume full production more than six weeks after the blackouts began.
Overall, production in Venezuela has hit a 16-year low, slumping to 732,000 barrels a day in March, and could fall even further.
“We estimate a loss of 400,000 barrels due to the economic and electricity crisis,” said Reinaldo Quintero, president of the Venezuelan Oil Chamber.
PDVSA’s joint effort with Chevron, the only American refiner doing business in Venezuela amid U.S. sanctions, has typically been one of the country’s biggest producers, with a daily capacity of 190,000 barrels. In January, Petropiar pumped an average 132,000 barrels a day. After the first power outage on March 7, production dropped to zero for two consecutive days.
March saw four major power disruptions that affected output, followed by two more in April. Since then, production has clawed back somewhat, reaching 92,000 barrels on April 16, but remains well below historic averages.
Chevron referred to questions to PDVSA, the operator of Petropiar, which declined to comment.
Petropiar’s oil fields rely on power from the Guri hydroelectric plant, located 240 kilometers (149 miles) to the south. The company’s extraction pumps need less power than its upgrader, the second-largest in Venezuela, which mixes the tar-like crude oil it extracts from the Orinoco belt, located way up north to the Caribbean shore.
Even so, electricity has been rationed at both oil fields and upgraders since the blackouts, causing operational issues and damage. But Venezuela’s power crisis is just one obstacle producers are facing.
"The electricity problem for PDVSA is in addition to two previous problems the government needs to deal with: sanctions and lack of investment, which are at the base of Venezuela’s falling production numbers," said Francisco Monaldi, an energy expert at Rice University.
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