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Venezuela Confident It Will Recover Oil Production By End-2019

Venezuela is confident that it can recover the oil production lost to U.S. sanctions after the ousting of John Bolton as U.S. national security advisor, Venezuela’s Oil Minister Manuel Quevedo said on Thursday.

Venezuela also hopes that the U.S. sanctions on its oil exports can be removed “very soon,” the minister, who also leads the state-held oil firm PDVSA, told reporters in Abu Dhabi, as carried by The National.

The Latin American country is in favor of “any decision that goes to the stability of the dialogue,” said Quevedo, who is also the rotating President of the OPEC Conference this year.

After U.S. President Donald Trump fired the superhawk Bolton earlier this week, oil market participants started to see more bearish signs for oil, because Bolton was leading the “maximum pressure” campaigns on Iran and Venezuela, with severe sanctions on their oil exports. With Bolton gone, some analysts expect that President Trump may go for a softer stance, especially on Iran.

Venezuela, for its part, is hoping for some sanctions relief, according to today’s comments from its oil minister.

“And for sure by the end of the year we will be recovering our production. We hope that the sanctions will be taken away very, very soon,” The National quoted Quevedo as saying.

According to the latest figures by OPEC’s secondary sources, Venezuela’s oil production dropped by 43,000 bpd from July to just 712,000 bpd in August. This compares to 1.911 million bpd production in 2017 and 1.354 million bpd for 2018. Since the end of 2018, Venezuela has lost around 600,000 bpd of crude oil production, due to the U.S. sanctions and the economic collapse in which the country doesn’t invest in maintenance and repair of oil infrastructure and facilities.

Unlike Venezuela’s expectations that it would recover its oil production by the end of 2019, IHS Markit said in July that output could soon drop to below 500,000 bpd next year amid the economic and political crisis. According to IHS Markit, Venezuela’s oil industry has deteriorated so much since 2014 that any recovery would be a long time coming.  

By Tsvetana Paraskova for Oilprice.com

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