Venezuela no longer has any operational oil rigs after the last oilfield services firm that was still drilling for oil in the country holding the world's largest crude oil reserves pulled its only rig out of service.
As of June 2020, Venezuela had one operational rig, according to the monthly international rig count of Baker Hughes.
However, after U.S. supermajor Chevron suspended its operations in Venezuela because of the U.S. sanctions on Nicolas Maduro's regime, Chevron's contractor Nabors Industries has shut down its activity,
Sergio Chapa of Houston Chronicle reports.
In the second quarter, Chevron fully impaired its US$2.6 billion investment in Venezuela because of uncertainties over the current operating environment and overall outlook, which contributed to the worst loss at the U.S. supermajor in three decades.
In Venezuela, "the exit of our main customer has led to a shutdown of our activity," Tony Petrello, president and CEO at Nabors, said on the Q2 earnings call last week.
With Nabors shutting down its rig activity, Venezuela is now left with zero oil drilling rigs, Russ Dallen, founder of investment bank Caracas Capital, told Houston Chronicle.
That sends the Latin American nation back more than a century in terms of rig count, to before 1914 when Venezuela's first oil well was drilled, according to Dallen.
Venezuela's oil production has been in freefall for several years, but the U.S. sanctions on its industry and exports, the crash in demand, and the pandemic further accelerated the decline.
Venezuela's oil industry was collapsing even before the oil price crash and the pandemic, due to the increasingly stricter sanctions in the U.S. maximum pressure campaign against Nicolas Maduro's regime and its sources of revenues. Oil income is pretty much the only hard currency that Maduro gets, so the U.S. is looking to stifle as much of Venezuela's oil trade as possible.
In addition, Venezuela's state oil firm PDVSA is severely cash-strapped and hasn't invested in the repair and maintenance of oil facilities and refineries in years.
PDVSA saw its June production plunge by 32 percent, with output in the country holding the world's largest oil reserves plummeting to its lowest level in 75 years in early June when it was just 374,000 bpd.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More