The president of Colombia, Iván Duque, assured last Thursday, March 10, in interview with the Voice of America that “Venezuela is not capable of generating more than 700,000 barrels of oil [diarios]”.
Duque completed contrasting Colombia and Venezuela, when asked about the intention of the United States with the meeting the previous weekend in Caracas between emissaries and President Nicolás Maduro. On the one hand, the Colombian recovery from 400,000 barrels to almost a million through “strategic investments” with Washington; on the other, how in the neighboring country “they destroyed all that capacity” to produce the three million before.
However, the state company Petróleos de Venezuela (PDVSA) has limited the publication of official figures, the two with sources other than the Organization of Petroleum Exporting Countries (OPEC) differ more than in other countries and the production has fallen in the recent years contrasts with the most recent signs of economic recovery.
Venezuelan oil in times of crisis
According to the Ecoanalítica consultancy, the Venezuelan economy shrank by 80% since Nicolás Maduro came to power in 2013 until the pandemic in 2020, especially with the drop in oil prices since mid-2014, which with US sanctions affected its export. .
After the death of Hugo Chávez, PDVSA would also have begun an institutional, technological and business deterioration that limited production, as the replaced president has denounced in his day, Rafael Ramirez.
Since then, PDVSA and the Oil Ministry have seen the reduction from three million barrels a day in 2013 to half a million in 2020, and have limited the publication of official statistics. The oil company does not publish its financial reports since 2016 and highlights quantities such as million barrels celebrated by Minister Tareck El Aissami in December 2021, reached with “Desperate measures”according Bloombergwaves goals of two and three million that Maduro announced in 2022, in line with the official economic projections.
However, the less than 700,000 barrels stated by Iván Duque are in line with the OPEC monthly monitoring on March 15 last. The organization, which Venezuela co-founded in 1960 and Chavez revived forty years later, distinguishes between data from “direct communication” with the authorities and those from “secondary sources.”
With the majority of members, the highest figure is the state one: in Venezuela, 788,000 barrels of crude oil compared to 680,000 for February, a difference in proportion that is more marked than that of the other countries. In January they had been 755,000 compared to 658,000, and in December 2021 871,000 compared to 718,000.
in your report OPEC Oil Production Data: The Role of Secondary Sources In 2018, researchers Paul Mollet and Saleh Al Muhanna, from the King Abdullah Petroleum Studies and Research Center in Saudi Arabia, warn that secondary sources are the best alternative, although their data often cannot be verified. These include international agencies and, also in turn, people in the media, state, industrial, financial, corporate and academic institutions, or local consumption and exports.
According to the document, the United States Energy Information Administration (EIA) “admits that it has problems finding reliable data from countries with which the United States has a difficult relationship, such as Iran and Venezuela.”
Although it also points out that the IHS Markit agency considers that in Venezuela there are good sources on the ground, the data from some countries may vary depending on what they produce, since the EIA includes low-density condensate in its definition of crude oil, while OPEC doesn’t. Heavy crude from the Venezuelan Orinoco basin, for example, “is mixed with lighter diluents, usually imported naphtha, which is then exported.”
Venezuela, between Russia and the United States
Until at least 2020, Venezuela had the largest proven oil reserves in the world: 304,000 million barrels, 18% of the global total, according to British Petroleum. If Chávez’s “petrodiplomacy” had put the country on the map, the international crisis in the sector and the sanctions aggravated the internal one, but they did not finish taking it out. Having forged alliances as foreign minister, Maduro approached China, Turkey, Iran and Russia as president.
But with the recent invasion of Ukraine, the United States has banned imports of Russian hydrocarbons. The Biden government then indicated that the meeting with Venezuelan officials had been to discuss aspects of “energy security”, release US prisoners and press for dialogue with the opposition to be resumed, but his spokesperson Jen Psak clarified that “for now” no They talked about importing to balance prices.
Although the situation may present an opportunity, Venezuela only has six refineries and it must look for processors in the Caribbean, the United States or Europe to refine or lighten it so that it can circulate. Nor does it have the infrastructure to bet on liquefied natural gas. In this sense, Duque argued that Colombia had more “capacity to offer energy solutions” to the United States than Venezuela after his first meeting with Biden.
Faced with the geopolitical situation in the country, the International Crisis Group published last February the report How to overcome the global fracture on Venezuela. The document recalls that the dispute over the presidency between Nicolás Maduro and Juan Guaidó divided Latin America and part of the world, including the main powers, regarding Venezuela and its oil, and that the lack of negotiation allowed each party to forge their respective alliances.
However, as the country is still in economic and humanitarian crisis, the report points out that “those interested have more to gain from a peaceful and negotiated solution” than they would be able to promote.
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