Venezuela exported 742,535 barrels of crude daily to the United States in November, a 23-percent increase on October, but a 10.5-perent decline on November 2015, Reuters reports, based on data collected from trade flows.
At the receiving end of Venezuelan crude, the unit of state-owned PDVSA, Citgo Petroleum, topped the list, followed Valero Energy, Phillips 66, and Chevron. Venezuela produces heavy crude that U.S. refineries need for blending with lighter grades to produce fuels and other oil products.
Venezuela has been perhaps the worst hit by the oil price crash as its economy is overwhelmingly dependent on oil revenues. In addition to prices, however, PDVSA has suffered from its own bad management and lack of investment, which has crippled the country’s energy industry and wreaked havoc on the country’s economy and society.
The oil company is currently letting thousands of barrels of oil literally burn as it has no money to fix the processing equipment it has left to rot, according to a Wall Street Journal report from October. Because of this mismanagement, daily crude oil production in Venezuela slipped by 11 percent in the 12 months to September 2016, to 2.3 million barrels.
Now, the country has agreed to slash 95,000 bpd from this total in compliance with the OPEC November 30 agreement on production cuts. Venezuela was the most active OPEC member in the negotiations leading up to the agreement.
PDVSA is struggling to escape bankruptcy. On November 2016, the company missed $404 million in coupon payments on three of its bonds, and it has now activated a 30-day grace period after not meeting the full coupon payments on its 2021, 2024 and 2035 bonds. Furthermore, PDVSA has missed the opportunity to increase investment and production in the last ten years, when the average oil Brent prices were $80 as opposed to $53 a barrel on 8 December 2016.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.