CARACAS – Production at state-owned Petroleos de Venezuela (PDVSA) fell by 100,000 barrels per day (bpd) to 1.7 million bpd in December, the lowest level since 1989, S&P Global Platts said in a report released on Monday.
Venezuela’s oil industry had not performed so poorly since the December 2002 to February 2003 strike that paralyzed the energy sector, S&P Global Platts said, citing Organization of Petroleum Exporting Countries (OPEC) figures.
The South American country’s petroleum industry is reeling from a social, economic and political crisis, as well as the sanctions imposed by the US government.
In August, the Trump administration imposed financial sanctions targeting the Venezuelan government and PDVSA.
The sanctions ban US companies from trading in newly issued debt belonging to Venezuela’s government or PDVSA.
Several credit rating agencies have declared PDVSA to be in “default” on different bonds.
Venezuelan officials blame the debt repayment problems on the sanctions imposed by Trump and the drop in production on corruption inside PDVSA.
More than 60 people, including two former heads of PDVSA, have been arrested as part of an operation targeting corruption at the state-owned oil giant.
President Nicolas Maduro, meanwhile, named a Major General with no oil industry experience to lead PDVSA and end alleged corrupt practices at 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