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Venezuela’s Oil Minister Manuel Quevedo has discussed plans with state-held oil company PDVSA to raise the country’s crude oil production in the second half of the year.
While Venezuela and its struggling oil firm claim that they are revising their production planning in order to increase the country’s oil production capacity and make this year a year of “consolidation and stabilization”, basically no one else thinks or claims that Venezuela could soon be able to reverse its steep production decline which sees it losing more than 40,000 bpd of crude oil production every month for several months now.
According to OPEC’s secondary sources in the latest Monthly Oil Market Report, Venezuela’s crude oil production dropped in June by 47,500 bpd from May, to average 1.340 million bpd last month. This compares with an average of 2.154 million bpd in 2016, and an average of 1.911 million bpd in 2017. Venezuela, for its part, has been self-reporting to OPEC much higher production figures, with the June production reported at 1.531 million bpd.
Amid plummeting crude oil production, PDVSA is said to have failed to honor its supply obligations in early June, and has started to refine imported crude oil.
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The plunging oil production is nearing the psychological threshold of just 1 million bpd as early as this year, analysts and industry experts say, and don’t see how production can be restored after years of underinvestment and mismanagement.
On top of the lack of investment and an exodus of oil workers who don’t see the point of working for salaries that become worthless overnight due to the 13,860-percent hyperinflation, ConocoPhillips is looking to and is already seizing PDVSA assets in the Caribbean in a bid to enforce a court ruling that awarded the U.S. firm US$2 billion in compensation for the forced nationalization of company assets in Venezuela.
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.