Oil executives worried over lack of essential element for Venezuela expansion: power
XLE•Oil executives in Venezuela say unreliable power is obstructing expansion plans, with an electricity deficit above 1,500 megawatts and only 40% of installed generating capacity available. The government aims to restore up to 4,800 MW by year-end, a target experts doubt it can meet.
1. Power blocks expansion
Executives at an energy conference in Caracas warned that unreliable electricity is the biggest obstacle to oil and gas expansion projects. Companies have submitted plans to capture flared gas for power generation, but none have started. A January legal mandate allows new energy-sector projects to generate their own electricity.
2. Capacity remains limited
Venezuela has an electricity deficit of more than 1,500 megawatts, and just 40% of its installed generating capacity of around 32,800 MW is available, said Sandra Conde of the Development Bank of Latin America and the Caribbean. She estimated that rehabilitating and automating the power system would require $5 billion. The government has said up to 4,800 MW would return to service by year-end, but analysts and experts doubt it can meet that goal.
3. Executives call for coordination
Hunt Energy Holdings CEO Hunter Hunt said Venezuela's peak demand of about 16,000 MW was not so large that solutions were impossible, and called for a more coordinated effort. Power outages of up to 10 hours a day are affecting households and businesses, while major oil developments in the Orinoco Belt will require more electricity.
