Venezuela's National Assembly voted unanimously to end the state's 19-year hold on electricity. Oil producers get the first opening, since they can build off-grid plants for their own fields. The state grid that households depend on stays under state control.
Venezuela's National Assembly passed unanimously on Tuesday a law that opens the electricity sector to private capital for the first time since Hugo Chávez nationalized it in 2007. The law lets oil producers build power plants for their own fields without state authorization, as long as those plants stay off the national grid.
Other private generators need a concession from the Ministry of Electric Energy for any plant above 50 megawatts. National Assembly president Jorge Rodríguez said those generators will sell mainly to large consumers, at tariffs the government has yet to publish.
Oil expansion needs power off the grid
Aging terminals, crude-quality problems and grid failures held Venezuela's oil exports near 1.25 million bpd through the summer, with tankers waiting as long as 30 days to load. The country as a whole produces 1.1 million to 1.2 million bpd of crude oil.
Meanwhile, the White House announced on August 31 that North American Blue Energy Partners received 100-year concessions over 17 fields in the Lake Maracaibo region and the Orinoco Belt. Chevron pumps about 290,000 bpd in Venezuela and plans to spend more than $7 billion through 2031 to raise that to about 600,000 bpd.
Households stay on the state grid
The grid that households use stays with the state. Experts estimate it generates about 12,000 megawatts, against demand that reached 16,400 MW in September. Caracas has yet to guarantee payment to the suppliers it needs for repairs.
Power expert Miguel Lara puts the cost of stabilizing the grid at no less than $15 billion over three years. The Inter-American Development Bank is owed more than $2 billion. Foreign companies working with the Venezuelan state operate under US sanctions licenses that Washington can change at short notice.
Source: Oilprice.com
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