Venezuelan President Nicolas Maduro has promised to start increasing the crisis-stricken country’s oil production during his second six-year term in office.
AFP reports that during his inauguration speech, Maduro said he will seek the help of OPEC to double Venezuela’s oil production, which is currently at 70-year lows and much below its production quota under the OPEC cut agreement. Maduro said the current production rate—about 1.5 million bpd—would need to increase by 1 million barrels daily by the end of this year.
Further in his speech, Maduro said that Venezuela will defeat the U.S. sanctions and its economy will reverse its course to a more positive one, admitting, however, that it will be a tough job because of the sanctions and the ruinous state of its oil industry.
"I cannot deceive anyone, they are going to create serious difficulties for us, painful difficulties, that we will face gradually -- we will defeat them. Trump's sanctions will be nullified and defeated," Maduro said.
Venezuela has been teetering on the brink of collapse for months now, and the thing that could push it over the edge would be further sanctions from the U.S, whether banning Venezuelan oil exports to Gulf Coast refineries or U.S. light crude exports to Venezuela, which it needs to mix its heavy crude with lighter grades to make it marketable.
President Trump has made it clear that both those options are on the table as he seeks to punish the Caracas regime.
If the United States were to slap sanctions on Venezuela’s oil industry, it could accelerate its already swift decline. In April, Venezuela lost 41,700 bpd of oil production and its output averaged 1.436 million bpd, according to OPEC’s secondary sources. This compares to average oil production of 2.154 million bpd for 2016 and to 1.911 million bpd for 2017, and was the lowest production level since 1949.
By Irina Slav For Oilprice.com
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