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Venezuela's oil production crash will accelerate after massive blackout

The blackout that collapsed Venezuela caused chaos that will accelerate the collapse of its declining oil production, faced with an American embargo that will mean the loss of its main market, analysts estimate.

The horizon was already bleak before the massive power outage on March 7, with the pumping in the free fall and the state oil company PDVSA as standard and expelled from the financial markets by US sanctions. The emergency started to settle on Monday.

The International Energy Agency (IEA) warned Friday in Paris that the loss of barrels due to blackout could affect market supply, so it would be necessary to go to Saudi Arabia's complementary capacity.

In addition, as of April 28, US citizens and companies are forbidden to negotiate Venezuelan raw material, source of 96% of the country's revenue with the largest reserves of black gold.

Although sales are clearly down, it will be a blow to Washington's strategy of financially crushing Nicolás Madur's socialist government, as they make up 75% of PDVSA's cash flow.

Deliveries to the United States fell from 1.3 million barrels per day in January 2011 to only 100,000 during the first half of the year, in accordance with the Swedish Energy Agency in that country.

Maduro claims that the sanctions in the White House, which he broke diplomatic relations in January, have cost Venezuela about US $ 30,000.

The latest paralysis hit the weak industry hard. "Not a barrel came out during the power outages (…). This situation is just the beginning of a major deterioration cycle," said oil scientist Luis Oliveros to AFP.

Venezuela's oil production fell again in February and stood at just over one million barrels a day, 142,000 fewer than January on average, according to secondary sources of the Organization of Oil-Exporting Countries (OPEC).

A decade ago, it was 3.2 million barrels a day.

After blackout, the volume could fall to 500,000 barrels a day this year, warned economist Asdrúbal Oliveros, head of consulting company Ecoanalítica, referring to a report by Barclays, a London-based finance company.

PDVSA has not presented a balance of the effect of the electrical fault, during which it only stated that it met the internal supply of gasoline when long lines were formed at service stations. "We haven't stopped the business, nor will they stop!" He insured.

Three PDVSA tanks in the Anzoategui state (Northeast) set fire to Thursday, which the government condemned as a "terrorist act" by the United States in its offensive to get him out of power.

Wells in collapse

The IEA noted that "although there are signs that the situation is improving, the breakdown of the electrical system is such that" it cannot ensure that "repairs are sustainable".

"In some cases, the damage to the wells is irreversible and in others it is necessary to make a very strong investment to get them back into operation. The impact will be very difficult," emphasizes Luis Oliveros.

The number of active wells experienced a sudden decrease, due to allegations of lack of investment in exploration and maintenance and serious cases of corruption.

According to oil supplier Baker Hughes, 26 platforms operated in the country at the end of February, compared with 47 active a year ago. In February 2014 there were 74.

Maduro condemns that the massive electric fault was due to "cyber attacks" in Washington against the Guri hydroelectric power plant (Bolivar state in the south), generating 80% of the country's energy.

Several specialists reject that version and believe that blackouts – usually in the last decade – will continue to affect all economic sectors.

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