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Venezuela will be hard put to recover by end-2018 the crude oil production that it lost in the last couple of years, the country’s Oil Minister said during OPEC’s meeting in Vienna.
Reuters quoted the official as saying, “We hope that by year-end, we will have recovered the lost production, we have the capacity to do so, we’ve said so. This is a goal for 2018 that is very challenging for PDVSA ... but it’s the goal we’ve set ourselves.”
In May, President Nicolas Maduro said Venezuela will try to increase oil production by 1 million bpd by the end of the year and will rely on assistance from Russia, China, and OPEC for that.
To date, Oil Minister Manuel Quevedo said, Venezuela is pumping 1.5 million bpd, which is a lot less than the 2.37 million bpd it was producing just two years ago, before the years of mismanagement and lack of cash for maintenance brought about by the U.S. sanctions really started to bite in.
According to some observers, Venezuela’s oil production could slump to about 1 million barrels daily this year, which would be the lowest ever in its history.
It was precisely because of this production slump that OPEC managed to exceed its overall compliance with the production cuts agreed at the end of 2016, whose future the cartel is discussed today.
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The joint monitoring committee last night recommended a production increase of 1 million bpd, to be distributed proportionately among members and non-OPEC signatories to the deal, but Saudi Arabia’s Oil Minister Khalid al-Falih said the actual increase would be lower, at around 600,000 bpd, because not all members had the spare capacity to tap. The actual outcome of the meeting has OPEC increased production levels of the cartel back to the original levels set under the November 2016 quota.
However, according to Quevedo, “We have a recovery plan with the refineries to use the capacity that we have ... we have a lot of spare capacity that we will use as (crude) output increases.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.