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Venezuela Wants To Overhaul State Oil Firm PDVSA

Venezuela has set up a commission that will be working to reshuffle and reorganize its state oil firm PDVSA in the next few months, according to the country’s Official Gazette on Thursday, in what would be the latest Venezuelan attempt to show that it is trying to revitalize its dying oil industry.

According to OPEC’s secondary sources, Venezuela’s oil production in July dropped to below the 1.3-million-bpd mark—at 1.278 million bpd, plunging 47,700 bpd from June. This compares with an average of 2.154 million bpd in 2016, and an average of 1.911 million bpd in 2017.

Some analysts expect Venezuela’s production to fall to below 1 million bpd by the end of this year.

Venezuela has been claiming lately that it plans to raise its oil production.

Last week, PDVSA said that it signed a US$430 million joint service agreement with seven companies that would help it increase its crude oil production by 641,000 barrels per day.

On top of the incessant production slump, PDVSA has seen difficulties in exporting its oil cargoes after a partial closure at the Jose port at the end of August delayed shipments.

A week before that, ConocoPhillips reached a settlement with PDVSA to recover the full US$2-billion amount that an international court awarded it earlier this year for the expropriation of its oil assets in Venezuela a decade ago. PDVSA agreed to settle the dispute with Conoco and possibly save some assets in the Caribbean from seizures, as the U.S. oil firm said that it would be suspending the legal actions to enforce the award.

PDVSA has 90 days from August 20 to make the first US$500 million payment of the award to Conoco. On September 5, Conoco’s chief executive Ryan Lance said that the U.S. company was still awaiting the payment, but expected Venezuela to honor the settlement agreement. If payments aren’t made, however, ConocoPhillips would resume its legal enforcement actions, Lance noted.

By Tsvetana Paraskova for Oilprice.com

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  • Noufal on September 09 2018 said:
    Venezuela govt is responsible for all this problem. Having largest reserves but not able to produce sufficient. Govt gave subsidies to its people and neighbors instead of maintenance and development of oil fields.
  • Jose on September 08 2018 said:
    Pdvsa does not stand a chance to be effectively reshuffled and increase production. Its management is plagued with militaries and political activists, that have absolutely no skills for the technical posts they hold.
    Pdvsa is not a viable company as long as it is owned by the present government illegally elected.
  • Dune Moon on September 07 2018 said:
    "Venezuela has been claiming lately that it plans to raise its oil production."

    FIFY: Venezuela has been claiming for years and years that it plans to raise its oil production.
  • Alfredo on September 07 2018 said:
    Reorganize PDVSA??? Sorry, Maduro, the white people are never coming back.

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