Nov. 27 (Bloomberg) -- Petroleos de Venezuela SA and Chevron Corp.’s heavy-oil producing joint venture has been operating below capacity since an October power outage, an executive for Venezuela’s state-owned energy company said.

The Petropiar venture’s upgrader, a specialized plant that converts tar-like heavy oil into a lighter grade for export, lost a sulfur unit in the blackout, cutting output to 135,000 barrels a day, said Petroleos de Venezuela Vice President Eulogio Del Pino. The project is designed to handle 180,000 barrels of crude.

Venezuela’s power grid, strained by years of consumption that has outpaced capacity, has failed three times this year, causing nationwide blackouts. All four of Venezuela’s upgraders broke down because of the blackout, including a two-week stoppage at Petrozuata, the only one without a private-sector partner, Del Pino said. A smaller outage on Oct. 13 closed the Puerto La Cruz refinery.

“We had problems with the startup, with the coker unit, but we have resolved them quickly,” Del Pino said yesterday in an interview in Caracas. “We’re installing a 200-megawatt back-up system soon so this doesn’t happen again.”

Petropiar is repairing the sulfur unit and is trying to move planned maintenance from February to January, he said. Petroleos de Venezuela is trying to complete as much maintenance as possible while the Organization of Petroleum Exporting Countries has reduced output limits in place, Del Pino said.

An official at Chevron’s press office in Caracas said that as a minority partner, the company couldn’t comment on Petropiar. Chevron owns 30 percent of the project.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.

Last Updated: November 27, 2008 14:35 EST