Oil production drops in Venezuela and Nicolás Maduro’s promises are diluted

Venezuelan oil production, which has fallen by 28% since last December after a fleeting increase in the last months of 2021, is moving further and further away from the goal set by President Nicolás Maduro of pumping 2 million barrels per day (bpd) by the end of year.

Despite this decline, the president has not scaled back his forecasts and, just four months from the date set, he assures that the goal will be reached, “rain, thunder or lightning”, and that growth will continue afterwards, until reaching the 3 million bpd in 2023.

In 1997, when Chavismo had not yet come to power, Venezuela produced 3.2 million barrels per day and for the next 20 years it remained above 2 million.

But the Venezuelan oil industry, after being one of the strongest in the world, has collapsed, especially in the last five years, due to lack of investments, reduction of qualified human resources, management, corruption and, more recently, the sanctions imposed by the United States, according to specialists.

kept low

And so, while Maduro insists on increasing production, Venezuelan authorities have reported to the Organization of Petroleum Exporting Countries (OPEC) a sustained decline in recent months, in a context in which the world is demanding a greater supply of crude oil which contributes to to reduce prices, fired by the war in Ukraine and Western sanctions on Russia.

Last month, the country produced 629,000 barrels per day, nearly 100,000 fewer than in June, according to the OPEC report, which reflects official data.

This data also represents a decline of 242,000 bpd from December when it closed at 871,000 bpd.

In this scenario, for the former president of the Venezuelan oil chamber, Reinaldo Quintero, it is not possible to achieve the goal in the rest of the year.

“It takes much more time. It is a possible goal. It can increase by 200 (thousand), 400,000 barrels per day, as happened in 2021, (but) it is necessary to obtain the relaxation of the sanctions which, in turn, is subject. to dialogues and negotiations, “the businessman told EFE.

With the lifting of the sanctions, he calculated, Venezuela will take “two or three years” to reach 2 million barrels a day, which also depends on the amount of resources injected and the overcoming of “self-sanctions”.

In other words, the internal decisions affecting the industry, including the lack of maintenance and the state monopoly of the company.

US sanctions

The “coercive” measures imposed by the US against Venezuela for its “political differences” have come at a cost: one million barrels, according to Quintero.

“North America and Venezuela need each other and, even so, they cannot trade oil because there are political priorities above strategic priorities. So, they end up paying more for gas there and we end up selling it for less. in China, when we could sell it, it is more towards North America and they, at the same time, lower the price of their fuel “, he assured.

This need for both countries, whose relations broke off in 2019, was highlighted in the recent rapprochements between the Maduro government and a US delegation sent by President Joe Biden, which, however, maintains the recognition of the former opposition MP Juan Guaidó as interim president.

Lack of maintenance

But the production problem goes beyond oil sanctions. In fact, if the United States were to revoke these measures, pumping would not increase “rapidly” due to several internal factors, such as deteriorating infrastructure, recently reflected in failures in crude oil upgrades, oil specialist Louis Olivers told EFE. .

You think, Venezuela does not have enough money to reverse this deteriorationfor which hard-to-find investments are needed, since the country is not, at this time, a “desirable destination for most of the world’s oil companies”.

The nation is also asking for major investments in the electricity sector, the crisis of which, witnessed by the thousands of failures reported every month, has also affected the oil business.

Therefore, he added, reaching 2 million barrels a day in 2022 is “impossible”, and less without a “significant influx of investment”.

Source: EFE

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