Analysis: Venezuela’s oil production plummets amid chaos and industry defections
Staggering debt, crumbling equipment and infrastructure, and mass worker resignations, have set back Venezuela’s oil industry decades, with experts saying they see scant prospects of any turnaround.
- Crude output of 1.70 million b/d lowest since strike in 2003: Platts survey
- Lack of safety protocols could cause ‘catastrophic’ refinery accident: analyst
- Traders say PDVSA’s moves in the market signal company distress
Venezuelan crude output plummeted in December to 1.70 million b/d, according to the latest S&P Global Platts OPEC survey released Monday.
The output level represented a decline of 100,000 b/d from November and a low not seen for more than 15 years, when a major strike from December 2002 to February 2003 hobbled production.
Not counting strike-affected months, Venezuela’s production was last this low in August 1989, more than 28 years ago.
PDVSA is also facing internal protests and widespread resignations of refinery personnel who fear a serious accident, since security protocols are not being followed, added the sources, who spoke on condition of anonymity.
Several market watchers have put Venezuela top of their geopolitical risk lists, with the economic crisis and PDVSA woes seen likely to continue, if not accelerate, amid threats of further US sanctions.
“The Venezuelan economy could collapse at any moment,” said Torbjorn Kjus, oil market analyst with Norway’s DNB Bank. “We could envisage scenarios spanning from outright civil war to a state coup, to a general strike or even just one more year of strangulating slow death for the economy. Neither of these outcomes bodes well for Venezuelan oil production.”
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