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Venezuela is investing in crude oil production recovery and aims to boost its output four times by the end of the year, to 1.5 million barrels per day (bpd), Oil Minister Tareck El Aissami, a close ally to Nicolas Maduro, told Bloomberg in a recent interview.
“Without any financing, with our own money, we’ve been able to invest enough to stop the slide and start a gradual recovery,” El Aissami told Bloomberg.
Despite the sanctions and despite the severe crisis which became even more severe with the pandemic and plunge in oil prices last year, Venezuela claims it would quadruple its crude oil production and put an end to the incessant lines at all gas stations in the country holding the world’s largest crude oil reserves.
According to El Aissami, crude oil production in Venezuela has now exceeded 700,000 bpd, up from less than 400,000 bpd in the summer of last year when output plunged in the wake of the pandemic and the crash in oil prices.
OPEC’s secondary sources place Venezuela’s oil production in May at 531,000 bpd, up by 45,000 bpd compared to April, as per OPEC’s latest Monthly Oil Market Report (MOMR). Venezuela self-reported to OPEC oil production of 582,000 bpd for last month, up by 130,000 bpd from its self-reported production level for April.
Venezuela boosting oil production to 1.5 million bpd by end-2021 is an “impossible” target, Francisco Monaldi, an expert on Venezuela’s oil industry at Rice University, told Bloomberg.
“Even getting to that would be implausible in the medium term; production capacity has been falling since 2014 and there have been no oil rigs operating in Venezuela for a year,” Monaldi told Bloomberg.
Maduro, for his part, told Bloomberg Television in an interview last week he had been waiting for the Biden Administration to negotiate a deal that would bring relief to the U.S. sanctions.
A U.S. State Department spokesman, however, told Bloomberg that Maduro should do more to restore some democracy in the country if he is to expect a lifting of the sanctions.
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.
If Venezuela can self-finance investments in its oil industry from its own resources (may be using its gold reserves), then it is possible to raise its production to 1.0 million barrels a day (mbd) by the end of 2021 and 1.5 mbd by the end of 2022.
Venezuela has shown great tenacity, ingenuity and resourcefulness in the face of US sanctions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London