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Back from a visit to Moscow, Venezuelan President Nicolas Maduro tweeted a video on Thursday, in which he said that Venezuela and Russia have signed US$5-billion investment deals to increase oil production in the Latin American country.
Russia and Venezuela signed contracts to guarantee US$5 billion investments to increase oil production with Russian partners of joint ventures, Maduro said, after he returned from a visit to Moscow, where he met with Russia’s President Vladimir Putin.
Putin condemned “any actions of clearly terrorist nature and any attempts to change the situation by force,” the Kremlin said in a brief transcript of the meeting.
“I think we have found the point that helps us survive and launch a rather full, comprehensive economic programme that fully complies with the economic relations between Russia and Venezuela,” said Maduro.
Russia, alongside China, is now the only partner Venezuela has, but the Russians and Chinese are not giving away their aid to Venezuela for free—they expect payments in Venezuelan oil.
Last week, reports emerged that Igor Sechin, the chief executive of Russia’s biggest oil producer Rosneft, had recently flown to Caracas to have words with Maduro regarding delays in the shipments of Venezuelan crude oil that Caracas had agreed to send to Russia as a repayment for cash. According to Reuters sources, a Chinese delegation has also recently visited Venezuela.
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Just like its economy, oil production in the world’s largest holder of crude reserves is also in free fall. In October, Venezuela’s crude oil production plunged by another 40,000 bpd compared to September, to stand at just 1.171 million bpd, as per OPEC’s secondary sources. To compare, Venezuela’s oil production averaged 2.154 million bpd for 2016 and 1.911 million bpd for 2017.
The economic collapse adds to years of mismanagement and underinvestment in the oil industry to further complicate attempts in Venezuela, one of OPEC’s five founding members, to stop the steep decline of its oil production. Venezuelan people are fleeing the country en masse amid an aggravating humanitarian crisis and an extreme poverty rate of 40 percent.
According to the IMF, Venezuela’s economy will collapse by 18 percent this year, while inflation is expected to be at 1,370,000 percent.
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.