Venezuela’s state oil company, PDVSA, has halted the export of natural gas to Colombia due to weather factors, the Colombian Mines and Energy Ministry announced, according to Business Recorder.
The two countries had previously signed a contract that specifies provisions for the neighbors to supply their own markets prior to exporting energy products elsewhere. Under the terms of the contract, Venezuela is to export 39mcf/d of gas to Colombia to cover over 3% of its daily supply, a ministry’s statement explained.
The El Nino weather phenomena has caused drought and water shortages across Colombia, which resulted in energy production deficiency as some 70% of the Andean country’s energy is supplied hydro-electrically. In response to a request by the Colombian state oil company, Ecopetrol, PDVSA stated that due to climate variability it would not renew its gas exports for the time being.
Meanwhile, Stratfor‘s analysis indicated that Venezuela’s energy sector might see some dynamic developments due to the ongoing political transition in the country and its worsening financial situation. The new government may re-evaluate some foreign policy decisions that have become economically burdensome, including the country’s discounted energy shipments to Cuba and its oil-for-loans deal with China.