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How Much Further Can Venezuela’s Oil Production Fall?

Ambivalent is the word that best describes the condition Venezuelan President Nicolás Maduro has found himself in. From a formal point of view, his January 10 reinauguration went along smoothly and oil production, the backbone of Venezuelan economy, has managed to bounce back somewhat from the trough it has found itself this autumn. Yet if you look closely, navigating through 2019 might turn out to be even more difficult for the Bolivarian leader than surviving the arduous year of 2018. International pressure is mounting, including Caribbean countries that thusfar have been either supportive or neutral towards the Venezuelan political leadership, all the while PDVSA still struggles to become a „normal” national oil company.

But first let’s talk a bit about Venezuela’s success stories. After the steady declines in oil output witnessed in the first half of 2018, plummeting from 1.65 mbpd in January to 1.25 mbpd, production has stabilized somewhat around 1.15mbpd mark. PDVSA attributes this to the improved functioning of the three upgraders operating in the country, used for creating synthetic export grades out of the bitumenous 8-10° API crudes that the Orinoco Belt yields. The now-working crude upgraders are inevitably linked to foreign oil majors – PetroMonagas is developed with Rosneft, PetroPiar with Chevron, PetroCedeno with Total and Equinor – as the fourth upgrader, fully owned by PDVSA, has been out of operation for…




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