NEW YORK – Venezuela’s total production performed well below government’s expectations in the first 15 days of November, highlighting the struggle authorities are facing to boost the nation’s main source of revenue and foreign currency.
According to internal documents obtained by Zignox, the nation’s crude output averaged 876,100 barrels a day in the first two weeks of November, or more than 500,000 barrels/day short of the original production goal of 1,418,000 barrels a day set for the month by the oil and gas conglomerate Petroleos de Venezuela SA, PDVSA.
The documents offer a rare glimpse of the actual daily output of each of Venezuela’s major oil regions and offer a succinct explanation of the causes of delays and incidents in each field as well of the remedies being implemented by the subsidiary of Exploration and Production or E&P. The documents show a clear underperformance in the output coming from the super-heavy crude fields in the Orinoco belt as well as from the Western region, known in Spanish as Region Occidente.
Calls and text messages to the media department of the state-owned company PDVSA, as well as to the Exploration and Production subsidiary seeking comments went unanswered.
|Exploration and Production|
|PDVSA Daily Production Report|
|Week #46||Date: November 15, 2021|
|Area||Monthly Average Nov. 2021 Plan||Real Average November 2021||Daily Real||Var.|
|Sur del Lago Trujillo||61,9||45,0||49,1||-12,8|
|Punta de Mata||181,6||124,2||124,2||-57,3|
In February, Venezuela’s oil minister, Tarek El Aissami, announced a 1.5-million barrels per day production goal for 2021. However, the South American nation has slashed its oil output target by one-third to 1 million barrels, Bloomberg News reported November 5, citing internal documents and a person with direct knowledge of the plans.
November’s output figures represent an important increase compared with secondary data reported by other institutions. OPEC’s latest Monthly Oil Market Report shows that in October the nation’s output averaged 590,000 barrels per day, providing evidence of the mismanagement, lack of investment and the effect of U.S. sanctions imposed over the company in January 28, 2019. According to OPEC, at the end of the first year of oil sanctions Venezuela produced an average of 796,000 barrels/day, and last year the figure declined to only 500,000 barrels each 24 hours.
Economy in Shambles
Venezuela’s gross domestic product shrank 25% last year, and is on pace of growing for the first time since 2013. In early October, Credit Suisse raised its gross domestic product growth forecast to 5.5% from a previous projection of 4% amid an improving oil production and faster-than-expected return-to-normal mobility levels limited by the COVID-19 pandemic.
However, if the general economy is set to start a recovery after years of severe contraction and largest migration in history, inflation in the South American nation will reach 915% this year, from a previous estimate of 1,950%, the investment bank said in a report to clients.
Venezuela is set to “remain trapped in a seemingly never-ending economic depression and hyperinflationary spiral”, New York-based Goldman Sachs said in a research note November 9. The nation’s economy has been contracting uninterruptedly since 2014, to an estimated 77% of GDP during 2014-20, and is expected to decline further during 2021-22, the investment said.
“Venezuela is experiencing one of the worst peace-time economic downfalls in modern history, with the contraction of real GDP far exceeding that of the United States during the Great Depression (-28%), of Spain during the Spanish Civil War (-28%) and of Greece during the more recent crisis (-27%),” Goldman Sachs concluded in the report.
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