Rafael Ramírez, former Venezuelan Oil Minister, stated that the country will not be able to substantially increase its crude supply to compensate for the possible absence of Russian barrels as a result of the war in Ukraine and Western sanctions imposed on Moscow.
Speaking to EFE, the former president of the state-owned company Petróleos de Venezuela (PDVSA) between 2002 and 2013, under the government of the late Hugo Chávez, recalls that the Caribbean country’s oil industry “came down” in recent years.
“I don’t see that Venezuela can contribute substantially to balance the oil market,” says Ramírez.
He considers that the recent and surprising visit to Caracas by a US delegation, whose government does not recognize the current Venezuelan president, Nicolás Maduro, and who imposed sanctions in 2019, is due more to geopolitical interests than oil interests.
“I think the United States does not have much hope” that Caracas will compensate for the crude that Washington has decided to stop buying from Moscow in retaliation for the Russian invasion of Ukraine, he says.
“What matters is what political movement is behind that visit,” he adds. And he ventures that, given the strong Russian support for Maduro, the United States would be trying to reduce that influence.
In his opinion, Washington “is now seeking, since Russia has problems on its European front, to also undermine (Moscow’s) support in the rear.” He asserted this in reference to the closest allies of the Kremlin in the region (Cuba, Nicaragua and Venezuela).
The “collapse” of PDVSA, according to Rafael Ramírez
In a telephone conversation from Rome, where he says he lives “in exile” and works as a consultant in the oil and gas area, Ramírez accused Maduro of having treated PDVSA “as his enemy.”
Investment in the sector has ceased, the company has been “militarized” and infrastructures have been dismantled to “sell them on the international scrap market,” he recalls.
“In the company there has been a tremendous political persecution. There are still more than 150 high-level managers in prison. About 30,000 young engineers have left PDVSA », he adds.
The result is a drastic drop in the country’s productive capacity, accentuated by the financial sanctions imposed by the United States on the state oil company.
“Between 2014 and 2022, pumping has fallen by 2.4 million barrels per day (mbd), which represents 84% of our (previous) production capacity. I have not seen such a collapse in the history of any oil-producing country,” Ramírez denounces.
Now, Venezuela is producing “barely between 600,000 and 700,000 barrels per day (bd)”. Very far from the 3.3 million barrels per day (mbd) that came to be extracted under Chávez.
«I, who was at the head of the industry for twelve years, do not see how Venezuela, even without US sanctions, can exceed one million barrels per day. There is no way”.
This statement by Ramírez contrasts with the 2 mbd that Mature says it is the pumping goal for this year.
Russian dependency
But not everything is production, highlights the former minister, the marketing system for Venezuelan crude has also collapsed.
PDVSA’s own fleet of ships was lost, which allowed it to directly transport “between 60% and 70% of exports, which were 2.5 mbd in 2013,” he recalls.
Now, most of the transport of crude that leaves Venezuela, and which Ramírez estimates at just 450,000 bpd, “is in the hands of the Russians or the Chinese.”
“Russia’s support has been essential to keep Maduro in power,” he says. He points out that the great Russian influence over Venezuela obviously causes “annoyance in the United States.”
Chinese debt
Regarding Beijing’s influence, he estimates it less than Moscow’s, since “the Chinese have been more cautious. This is because Maduro has breached a set of financial commitments with them. And they see the situation in Venezuela as a chaos in which they do not want to get involved, although they are there.
He explains that between 2014 and 2017 Caracas doubled its debt with China, totaling 70,000 million dollars. With which a good part “of the little export that Venezuela does is highly committed to paying the debt with China.”
Rafael Ramírez was a staunch collaborator of Chávez and designed Venezuelan oil policy until he was relieved as head of PDVSA in 2013 by Maduro. Whom he accuses of “betraying the legacy” of Chavez, founder of the so-called “Bolivarian revolution.”
Last January, the Supreme Court of Italy refused to extradite him to Venezuela, as demanded by the Justice of that country, which accuses him of corruption.
