2023-06-15 08:42:05
Venezuela reported production of 819,000 bd in May, six months following the license to Chevron, according to the latest monthly report from the Organization of the Petroleum Exporting Countries (OPEC), published on Tuesday. The figure had surpassed 800,000 bd in April for the first time in 16 months.
The numbers, however, are light years away from the best times of the local oil industry: the supply from the country with the largest oil reserves in the world exceeded 3.2 million bp two decades ago.
It had closed 2022 around 650,000 bd.
“Currently it is around 120,000 barrels”, points out the specialist, which represents regarding 15% of Venezuela’s supply.
More problems than anticipated
Navarro stresses that “Chevron has encountered many more problems than it expected” due to the deterioration of infrastructure and the politicization of the industry.
In fact, according to the data provider Argus Media, the US transnational revised its projections downward, reducing its production estimate for the country by the end of the year from 200,000 bd to 175,000 bd.
An example that this firm highlights: the poor condition of the strategic navigation channel in Lake Maracaibo, in the oil state of Zulia (northwest) “limits the size of the oil tankers that Chevron can use.”
The Venezuelan oil industry collapsed due to lack of investment. It has only two active drills, according to the Baker Hughes firm. The number exceeded one hundred two decades ago.
PDVSA is also mired in a corruption scandal that has left dozens of officials detained since March and forced the resignation of the oil minister, the powerful leader Tareck El Aissami, who disappeared from public life.
promise vs reality
Until 2018, before the embargo imposed a year later, Venezuela sent 500,000 bd to the United States and received 120,000 bd of light oil and diluents from that country to process its heavy crude. Chevron’s license allowed it to resume the importation of diluents.
Today, with the licenses to Chevron and other oil companies, the United States is the destination of 24% of Venezuelan crude, according to figures presented by Francisco Monaldi, director of the Latin American Energy Program of the Center for Energy Studies of the Baker Institute, in a forum of the consulting firm Ecoanalytic Venezuelan. China receives 62%.
Pedro Tellechea, Minister of Petroleum following the departure of El Aissami, has proposed bringing the country’s total production to one million barrels, a goal viewed with skepticism by specialists.
There would have to be “broader licenses,” Navarro points out, since the current authorization from Washington practically limits Chevron’s operations to the payment of 5,000 million of Venezuela’s debt with the company.
If there is no new “flexibility” of sanctions, the production ceiling would be around 850,000 bd, Monaldi points out.
The United States renewed licenses to Halliburton, Schlumberger Limited, Baker Hughes and Weatherford International in May to operate in Venezuela, while the Joe Biden administration declared its willingness to progressively lift sanctions without negotiations between the government of Nicolás Maduro and the opposition in Mexico They bring agreements towards the presidential elections next year in Venezuela.
With the negotiations frozen, “I don’t see incentives to continue expanding licenses in the Venezuelan oil sector, but I don’t see the Biden government’s willingness to increase the pressure either,” Navarro said.
Thus, the economist believes that the White House is committed to maintaining the current “status quo” in an oil market shaken by sanctions once morest Russia for invading Ukraine.
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