CARACAS – The oil production of state-owned Petroleos de Venezuela (PDVSA) fell by 100,000 barrels a day in December and stood at 1.7 million barrels per day – the lowest numbers since 1989 –, according to data from the energy market analysis firm S&P Global Platts.
This figure is “a minimum that had not been seen since its oil industry suffered the effects of a large strike between December 2002 and February 2003,” according to S&P Global, which uses sources from the Organization of the Exporting Countries of Oil (OPEC).
“Without counting the months in which the strike had an impact, it is necessary to go back to August 1989 – more than 28 years ago – to find such a low production by Venezuela,” the report published on Monday.
According to the document, “the country has been suffering from a spiraling economic, political and humanitarian crisis, with the state oil company PDVSA cutting funds, personnel and equipment and affected by the sanctions of the United States, which restrict their financing.”
The Administration of Donald Trump issued financial sanctions in August against the Venezuelan government and PDVSA, which prohibited US companies from negotiating new debt issued by the Venezuelan state and its state oil company.
PDVSA has been declared in default or suspension of payments by several international financial agencies, by delaying the payment of the maturities of several of its bonds.
The Venezuelan authorities blame the payment problems on Trump’s sanctions, and explain the drop in production at PDVSA – of which they have not offered official figures – on corruption within the company.
In a supposed campaign against this alleged corruption, more than 60 people, including two former PDVSA presidents, have been arrested, and President Nicolas Maduro has appointed a Major General with no experience in the sector to run the company.
“Experts say the prospects for any short-term improvement in oil production in Venezuela are slim,” says S&P Global Platts.
Before President Hugo Chavez came to power in 1998, PDVSA was producing 3.5 million barrels per day and was on track to increase production to 6 million barrels per day.
Over the weekend, PDVSA workers demonstrated against low wages, chanting that their children are starving. The basic wage in Venezuela has fallen to less than $6 a MONTH at the black market rate, so even a worker making 2 to 3 times the basic wage is earning less than $20 a month.
Russ Dallen - Future Scenarios in Venezuela - Presentation to SouthCom - 15 August 2016 by Latin American Herald Tribune on Scribd