• 3 minutes Will Iron-Air batteries REALLY change things?
  • 7 minutes Natural gas mobility for heavy duty trucks
  • 11 minutes NordStream2
  • 1 min GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 hour U.S. Presidential Elections Status - Electoral Votes
  • 24 hours Evergrande is going Belly Up.
  • 1 day World’s Biggest Battery In California Overheats, Shuts Down
  • 47 mins Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 17 hours Poland Expands LNG Powered Trucking and Fueling Stations
  • 3 days And now, hybrid electric locomotives...
  • 4 mins The unexpected loss of output from wind turbines compels UK to turn to an alternative; It's not what you think!
  • 2 days Ozone layer destruction driving global warming
  • 3 days The Painful Death of Coal
  • 2 days The coming Cyber Attack
  • 2 days Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th?
  • 2 days 'Get A Loan,' Commerce Chief Tells Unpaid Federal Workers

Maduro Hints At “New Business Models” In Oil

The Venezuelan National Assembly will consider reforms to the country’s oil law that will open the door to “new business models,” President Nicolas Maduro said this week, as quoted by Reuters.

Maduro did not offer any details on the reforms and what these new business models would entail. The statement appears to be the latest attempt by the Venezuelan government to reverse a seemingly irreversible downturn in the country’s oil industry, resulting from years of underinvestment, mismanagement, and U.S. sanctions.

The current law states that PDVSA must hold majority stakes in any oil venture with foreign and local private companies, and is the only entity allowed to market Venezuelan oil.

PDVSA has joint ventures with Russian and Chinese companies, and it operated a joint venture with Chevron until President Trump ordered the major to leave Venezuela last year. Reports said that even though PDVSA was the majority partner in these joint ventures, the day-to-day operations were largely left to be managed by the foreign partner.

Venezuela’s oil production has been on a steady and severe decline over the past few years, ever since the 2014 oil price crisis began, plunging the country into an economic crisis. Then after Donald Trump became president of the United States, sanctions targeting Venezuela’s oil industry added to the government’s woes with underinvestment and mismanagement.

Exports of crude have also been stifled by U.S. sanctions, but Venezuela, like its sanction buddy Iran, has been finding ways to get its oil to buyers abroad. Tactics have included masking the oil’s origin by adding chemicals to it, ship-to-ship transfers at sea, and selling the oil through companies with no track record in oil trading.

As a result, the latest tanker tracking data revealed that February exports rose to over 500,000 bpd, from less than 500,000 bpd in January. According to a Reuters report, the February export average, including both crude and fuels, was the highest in 10 months.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh Salameh on March 03 2021 said:
    This means that the Venezuelan National Assembly will consider reforms to the country’s oil law that will open the door to foreign investment and even foreign ownership of oil assets in Venezuela in order to revamp the country oil industry.

    President Maduro, the survivor of US sanctions and plots to remove him from power, will in effect be legislating into law what is already happening on the ground. This means that he will allow foreign oil companies to have a majority share in oil projects in the country and running these projects rather than limiting this right to PDVSA.

    For instance, Russia’s oil giant Rosneft already has huge investments in PDVSA and joint ownership in many oil projects in the country. Furthermore, Rosneft has been until recently marketing Venezuelan crude oil in defiance of US sanctions. US oil giant Chevron has been running the day-to-day operations of the projects it jointly shares with PDVSA until ordered by former President Trump to cease operations.

    And contrary to various claims, Venezuela has been managing to export up to 1.0 million barrels a day (mbd) of crude and fuel exports. Moreover, it doesn’t announce the size of its exports or report it to OPEC so as not to invite new sanctions.

    Venezuela has learnt from Iran tried-and-trusted sanction-busting methods including masking of Venezuelan crude through the addition of certain chemicals to obscure its origin, ship-to-ship transfers and using entities with no track record in oil trading to circumvent U.S. sanctions.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News