For years, Venezuela was a world leader in the oil industry. Today, its production has drastically declined, reaching unprecedentedly low levels. Crude oil fell by 11 percent in December, the Wall Street Journal reported, and throughout 2017 it fell by 29 percent.
That represents the largest decline in production in the country’s history, which comes largely as a result of mismanagement and a lack of investment.
However, Venezuela’s oil production is still far from free fall, according to Alejandro Grisanti, the Director of Ecoanalítica.
“Production fell by 216,000 bpd (barrels per day) in the month of December alone,” he said. “And in 2016, it was reduced by 649,000 bpd. I have no words to reflect my deep concern about the destruction of our oil sector.”
En los últimos 3 años, la producción petrolera ha caído 1.273.000 b/d de acuerdo a PDVSA. A los precios actuales, este petróleo que estamos dejando de producir representa USD 28 mil millones. Como no vamos a estar en una crisis humanitaria. #pobrepais
— Alejandro Grisanti (@agrisanti) January 18, 2018
Tweet: During the last three years petroleum production has fallen by 1,273,000 b/d according to PDVSA. With current prices, our oil production has decrease represents a loss of $ 28 billion USD. How could we not be in a humanitarian crisis. #poorcountry
The Venezuelan regime depends almost entirely on oil for revenue. The Wall Street Journal said the fall is more drastic than what Iraq experienced after the war in 2003, when when the rate of extracted crude oil fell by 23 percent.
Yet Venezuela is not suffering from a war. Instead, the decline in oil comes from an outrageous mismanagement of the economy.
According to data from PDVSA — the country’s state-owned oil company — oil production was 3,280,000 bpd in 1998. Twelve years later, that number has decreased to 2,271,000 bpd. However, there was a slight increase in production in 2012, when the average reached 2,807,000.
The Wall Street Journal said most experts expect yearly production to fall to 1.3 million per day very soon, meaning that Venezuela’s neighbor, Colombia, will actually be producing the same amount.
Oil production in Colombia is at 865,000 bpd, but it fluctuates. In 2016, the average was 886,000 bpd and in December there was a recovery in oil production.
Due to Venezuela’s failures, Mexico has stepped up and established itself itself as the great oil exporting power. Following Mexico is Brazil, and then Venezuela, which is followed by Colombia.
Experts expect oil production to continue to fall at the same speed as 2017. If the industry continues to deteriorate, and production continues to fall at the same rate as it has, November 2018’s production would, theoretically, be at zero.
Petroleum production in Venezuela has falled by 464 billion barrels per day (22.2%) in just 3 months, according to official reports from OPEP. There has been reduction for 15 months straight, and currently there are at 1.6 million bpd.
If production keeps falling at the rate it feel during the last trimester (154 thousand barrels per day lost per month, more ore less) petroleum production would reach 0 by November of this year.
