• 34 mins US Orion To Develop Gas Field In Iraq
  • 3 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 3 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 3 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 3 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 3 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 3 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 3 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 3 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 4 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 4 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 4 days Venezuelan Output Drops To 28-Year Low In 2017
  • 4 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 4 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 4 days Kinder Morgan Delays Trans Mountain Launch Again
  • 4 days Shell Inks Another Solar Deal
  • 5 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 5 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 5 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 5 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 5 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 5 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 5 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 5 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 5 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 6 days Norway Grants Record 75 New Offshore Exploration Leases
  • 6 days China’s Growing Appetite For Renewables
  • 6 days Chevron To Resume Drilling In Kurdistan
  • 6 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 6 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 6 days Nigeria Among Worst Performers In Electricity Supply
  • 6 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 7 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 7 days Saudis To Award Nuclear Power Contracts In December
  • 7 days Shell Approves Its First North Sea Oil Project In Six Years
  • 7 days China Unlikely To Maintain Record Oil Product Exports
  • 7 days Australia Solar Power Additions Hit Record In 2017
  • 7 days Morocco Prepares $4.6B Gas Project Tender
  • 7 days Iranian Oil Tanker Sinks After Second Explosion
  • 10 days Russia To Discuss Possible Exit From OPEC Deal

Breaking News:

US Orion To Develop Gas Field In Iraq

Alt Text

Maduro Tightens Grip On PDVSA As Production Plunges

Venezuelan President Nicolas Maduro has…

Alt Text

Maduro: Venezuela Could Stop Crude Oil Sales To U.S.

Embattled President Nicolas Maduro has…

Luis Colasante

Luis Colasante

Luis Colasante is the Group Energy Manager and Head of Economic Research at Sogefi Group. He is in charge of developing the Group energy strategies and policies; as…

More Info

Cash Strapped Venezuela To Import Gasoline As Crisis Escalates

Venezuela

For over forty days, hundreds of thousands of Venezuelans have taken over the main streets and roads of the country to protest against the dictatorial Venezuelan regime. Since the protests started, forty-two people have been killed, 2,371 arrested and thousands injured across the country.

Falling oil revenues due to low international oil prices, as well as the institutionalized government corruption, caused yet more protests, with the government once again using tear gas, water cannons and pepper spray alongside its paramilitary force - the “colectivos” (the heavily armed civilian branch of the “revolution”).

Venezuela’s economic, humanitarian and political crisis hit critical levels at the end of March, when Venezuela’s president and the Supreme Court of Justice initiated a process that would deprive the opposition-led National Assembly of its legislative powers. It is worth noting that the present Supreme Court of Justice was deviously designated by the previous National Assembly just days before they finished their period, a move designed to make it completely obedient to the Venezuelan president. Two days later, in response to the outcry of the international community, in particular from the Organization of American States (OAS), the Supreme Court tried to step back from its controversial dictatorial decision through a presidential mandate.

On May 1st, President Nicolas Maduro announced on national television that he would call an assembly to rewrite the country’s Hugo Chavéz Constitution. It was the solution that the government found to pacify the protest against him, but the opposition rejected this solution as an attempt to avoid new presidential elections.

Venezuelans are living day-by-day in a total chaos, facing a very complicated situation with rising crime and corruption rates, daily electric blackouts and shortages of both medicines and food (more than 80 percent). Venezuelans cannot get even the most basic lifesaving medical supplies such as common antibiotics. This critical situation does not seem to have an easy solution, due to the fact that most of the goods have to be imported due to Venezuela’s record low industrial output levels. Related: Rise In Rig Count Threatens To Undermine Recent Oil Price Spike

In its last report from May 11th 2017, OPEC reflected a steep fall in Venezuelan crude production. The cartel mentioned a decline of around 0.45 million barrels a day since 2015, putting the Venezuela production at 2.194 million barrels a day. Over the last 17 years, Venezuela’s oil production has decreased 1.135 million barrels per day representing a 34 percent reduction.

Venezuela is suffering gasoline shortages despite having the world's largest oil reserves; Venezuelan refineries are operating significantly below capacity because they are facing operational problems due to a lack of investments and maintenance. Falling output at refineries means that Venezuela needs to import more gasoline, squeezing the national budget even further. Refineries are currently working at less than 30 percent of average 2016 levels. State-run oil company PDVSA is importing between 100 and 150 thousand barrels per day of gasoline. Several tankers are waiting off the coast of Venezuela to discharge cargoes as the PDVSA has difficulties to pay their ship bills, resulting in a penalty of $26 000 per tanker per day.

Nine out of ten Venezuelans think that the actual situation is president Maduro’s fault and the call for early presidential elections grows louder and louder. Venezuelans know this is the only way to save the country from the socialist dictatorship but they are conscious that it will not be easy in a country which is governed by Castro-Cubans, the military, “Narcos” and a small group of Chavéz devotees, according to Moisés Naím, a former Venezuelan minister of trade and Central Bank governor.

Today, Venezuela’s democratic masquerade has crumbled, showing the real face of a dictatorship. Venezuelans are famished and the only way they have to pressure the government is to take the streets and request presidential elections, as they have been doing for quite some time. While the Venezuelan regime is experiencing its lowest ever approval rating, the government has maintained its military branches in every key post in the Venezuelan administration, making a democratic solution unlikely.

By Luis Colasante for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Naomi on May 21 2017 said:
    You could plant Hispanics on a gold mine in a lush agricultural region and they would starve. Spain, Mexico, Puerto Rico, Cuba, Venezuela are blessed with resources but cursed with socialist corruption. They always have too much work and not enough free stuff to go around. Starvation and less population is the only cure.
  • Marco on May 21 2017 said:
    Country ruined by incompetent and inexperienced politicians.
  • Thomas E. on May 22 2017 said:
    Venezuela, a rich country ruined by socialist dictators.
  • Ricardo on May 22 2017 said:
    The quantities are important around 150K b/d and the penalties $26K, they are 12 tankers waiting and some of them, has been waiting more than 10 days, it’s mean that PDVSA pay around $3 million by week only on penalties.
  • Martin on May 22 2017 said:
    it's a very clear description of the Venezuela crisis.
    PDVSA since March has tried to solve the fuel shortages by increasing imports, but payment delays have impeded tankers from discharging on time.
    This is one of 1st article speaking about cost penalties.
    Thanks for the data.
  • Brian on June 06 2017 said:
    Venezuela looks to sell discounted $5B in bonds.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News