Venezuela out of OPEC soon?

[jose chalhoub + 388]

Venezuela was one of the founding members of the OPEC, led by the iconic Juan Pablo Perez Alfonso, a thing most known by oil and historians in the world. Venezuela used to have a decisive voice within the organisation and a power to decide quotas and production and prices, especially in situations of rifts with Saudi Arabia at the end of the 80's and beginning of the 90's, since it had the production capabilities to decide and influence the direction of the markets through the OPEC. But now, in the last recent years, Venezuela in my personal and sole view might be about to be out of the OPEC, due to its crumbling production, critical refining situation, worsening worker environment, gasoline shortages and terrible mismanagement and corruption of the industry PDVSA, which is leading the country into the collapse of the country. Ironically Venezuela has been the crucial unintended causer of the largest cuts in the overall production of the organisation but not precisely on a controlled strategy but due to the ongoing mess and freefall of the oil production. So i particularly think that Venezuela wont have the capacity to even export oil if the situation continues to stay this way. I would like to read some opinions and insights from all my peers here about this issue. 

[BlackTortoise + 103]

It's very hard to look position of Venezuela in OPEC today. Once very important member with big influence in making decisions, today is looking a mess.  Its output is now at the lowest level in almost 30 years, which has fallen by 460,000 bpd from the October 2016 level used as a starting point for OPEC's cuts agreed in November that same year. Predictions for this country are not so bright, just deeper fall in nation's capacity to pump crude in the next few years, more than any other member of OPEC. And it will certainly become even worse for this country with the chaos that completely rules in this country. Will OPEC have a patience? Hard to predict but hard times are ahead of this country regarding oil exports without any hope that situation will change soon. 

[Rodent + 1,424]

Venezuela's energy minister flew all over the globe recruiting OPEC members to get onboard for the OPEC cuts. So while they don't have a big production stick to swing around now, they still seem to have some clout. True, they won't be able to export much if any very soon. But I say if tiny little Gabon can do it, so can Venezuela. With dues at $1 million, though, I think Venezuela may be priced out of its membership.

[Tom Kirkman + 8,860]

PDVSA used to be a world class National Oil Company.  Well run, tight ship, profitable, good business decisions, technically competent, experienced staff.

It has been lamentable to watch PDVSA turn into a political piggy bank instead of an oil company.

Chavez started the decline, and Maduro is going in for the kill.

PDVSA's decline and current circling of the drain is not the result of low oil prices.  It is the direct result of incompetent government interference.

In my view, unless and until the current government is changed to different leadership which has far less destructive policies, PDVSA will continue to sink in the quicksand of government incompetence and needless government interference.

That change will need to come from within Venezuela.  Which will probably be difficult as long as the military and police continue to prop up Maduro and his destructive policies.

[TraderTate + 186]

at the same time, they've got too much oil (even if right now they can't get it out of the ground) to NOT be a member of OPEC. But I suppose that also leads to the bigger question: Will OPEC itself be around forever? The OPEC 'PLUS' already changes things. 

[cathalibm + 4]

I dont think its a bad idea for them to leave OPEC. It would probably force them to sort out their economy which is down the toilet at the moment,.

[Rodent + 1,424]

2 hours ago, cathalibm said:

I dont think its a bad idea for them to leave OPEC. It would probably force them to sort out their economy which is down the toilet at the moment,.

It might force them to do things differently, but ultimately, I can't see how leaving OPEC is going to help their economy aside from saving a million smackers. With Maduro running the show, I don't see much room for improvement here.  

[lahcene mebarek + 1]

On 29/4/2018 at 11:16 AM, jose chalhoub said:

Venezuela was one of the founding members of the OPEC, led by the iconic Juan Pablo Perez Alfonso, a thing most known by oil and historians in the world. Venezuela used to have a decisive voice within the organisation and a power to decide quotas and production and prices, especially in situations of rifts with Saudi Arabia at the end of the 80's and beginning of the 90's, since it had the production capabilities to decide and influence the direction of the markets through the OPEC. But now, in the last recent years, Venezuela in my personal and sole view might be about to be out of the OPEC, due to its crumbling production, critical refining situation, worsening worker environment, gasoline shortages and terrible mismanagement and corruption of the industry PDVSA, which is leading the country into the collapse of the country. Ironically Venezuela has been the crucial unintended causer of the largest cuts in the overall production of the organisation but not precisely on a controlled strategy but due to the ongoing mess and freefall of the oil production. So i particularly think that Venezuela wont have the capacity to even export oil if the situation continues to stay this way. I would like to read some opinions and insights from all my peers here about this issue. 

venezuela is founding memeber of opec, and will be the last one that mus go out cause has the biggest reserve of oil in the world, all the comments are based on politics, and venezuela is not using his oil for political puposes, not more than saudi arabia that must wait for green light from usa to increase or decrease his production, humanity must look for peace and happiness for all peoples and let each country free to govern it self the way his people like, not look for more conflicts and wars..

[Rodent + 1,424]

8 minutes ago, lahcene mebarek said:

venezuela is founding memeber of opec, and will be the last one that mus go out cause has the biggest reserve of oil in the world, all the comments are based on politics, and venezuela is not using his oil for political puposes, not more than saudi arabia that must wait for green light from usa to increase or decrease his production, humanity must look for peace and happiness for all peoples and let each country free to govern it self the way his people like, not look for more conflicts and wars..

I think most of the comments are based on the fact that Venezuela's oil production has been falling with no end in sight, and what's more, its oil exports are nearing nil. Since OPEC's intent is to unify oil policies across its members and "stabilize oil markets", Venezuela's membership may soon be made irrelevant given that it is arguable whether its oil will ever see a market other than its own.

 

[jose chalhoub + 388]

thank you all for your comments, definitely my point raised here about Venezuela is first all being a venezuelan second of all having worked at venezuelan oil industry for more than 10 years so i have a little knowledge to say this, with sadness though, that right now venezuela does not count with the production to have a say in the organisation, especially having been one of the top 5 to found the organisation and being the main inspirer of the bloc, so this is the main motivation of this. I dont want to see Venezuela being a laughing stock of global oil markets after being one of the main sayers in the global markets. Definitely my point was based on technicalities and not political motivations, which by the way i have many also but this is not the space not the forum to discuss my political ideologies in my country which by no means is close to this disaster we, VENEZUELANS, are living right now. @lahcene mebarek

[jose chalhoub + 388]

19 hours ago, Tom Kirkman said:

PDVSA used to be a world class National Oil Company.  Well run, tight ship, profitable, good business decisions, technically competent, experienced staff.

It has been lamentable to watch PDVSA turn into a political piggy bank instead of an oil company.

Chavez started the decline, and Maduro is going in for the kill.

PDVSA's decline and current circling of the drain is not the result of low oil prices.  It is the direct result of incompetent government interference.

In my view, unless and until the current government is changed to different leadership which has far less destructive policies, PDVSA will continue to sink in the quicksand of government incompetence and needless government interference.

That change will need to come from within Venezuela.  Which will probably be difficult as long as the military and police continue to prop up Maduro and his destructive policies.

definitely spot on Mr Kirkman. Venezuela lived a period of low oil prices before Chavez era and yes venezuela was living difficult times, but in no way PDVSA was close to this destruction, and still PDVSA was producing more than 3 millions of barrels of oil. When i started working in the industry back in 2004, i had the chance to see old reports from as far as 2000 rating overall production in 4 million of barrels of oil, and without prices as high as 70 or 80$ per barrel. So definitely corruption and ransacking of the country by a mafia led by Mr Rafael Ramirez who for more than 10 years was the all mighty oil minister and President of PDVSA disguised as the most fervent advocate of Chavez and one his strongmen, had the opportunity to loot the industry. Period. I lived that era in its entirety until he left. 

[Tom Kirkman + 8,860]

Thanks Jose.  You are there in Venezuela and I'm not. 

Really wish I could offer some realistic advice, but it will be local Venezuelans who will need to make the necessary changes, not outsiders.

PDVSA has been systematically dismantled and corroded due to corruption and neglect.  Systemic change and systemic repair won't happen overnight.

[jose chalhoub + 388]

Thanks again Mr Kirkman, yes i believe so, but i started to believe that we might need a little foreign help especially due to the massive number of emigres of young workers to other countries, a massive brain drain, especially in the oil sector. Also i believe that PDVSA should go through a PEMEX like experience in order to clean up a little bit this whole mess... 

[jose chalhoub + 388]

At the same time, talking about OPEC and Venezuela's relevance within this bloc, i dont think the organisation will suffer much and feel much of an impact if the country decides to leave. If the path and trend of the production continues downward, then we might see some sort of an Indonesia style scenario, which we know was out of the organisation for quite a time then got back since it became for a time a net importer of oil. Lets remember also that OPEC is in some sort of a strategy of trying to show some sort of an expanded geopolitical influence even if it involves massive exporting countries or not, being these the cases of Ecuador for example, also the potential entering of Sudan and also Gabon, which altogether are not experiencing a critical situation regarding their state oil companies as far as i can remember. 

[jose chalhoub + 388]

Wandering also through all this, i think or wonder how convenient might be for Venezuela to belong to this organisation and in the eyes of the arab countries to have such a critical situation regarding a critical situation with a country member.. 

[Tom Blazek + 38]

Praying for the People of Venezuela.

[jose chalhoub + 388]

thanks sir @Tom Blazek i know we will certainly get out of this chaos sometime soon since we have the resources, natural and human. 

[TomTom + 183]

On 5/2/2018 at 11:13 AM, Tom Blazek said:

Praying for the People of Venezuela.

https://twitter.com/hashtag/NationalDayOfPrayer?src=tren 

You chose the right day for that!

[jose chalhoub + 388]

https://www.platts.com/latest-news/oil/caracas-venezuela/feature-venezuela-girds-for-further-deterioration-10400558 this is another proof of venezuela being out of opec soon... 

[lahcene mebarek + 1]

On 1/5/2018 at 2:49 PM, Rodent said:

I think most of the comments are based on the fact that Venezuela's oil production has been falling with no end in sight, and what's more, its oil exports are nearing nil. Since OPEC's intent is to unify oil policies across its members and "stabilize oil markets", Venezuela's membership may soon be made irrelevant given that it is arguable whether its oil will ever see a market other than its own.

 

membership in opec doesn t depend on how much produce a country, and for other members any member less producing make them happy, and the problems of venezuela aren t to be or not member of opec, it s big cultural and social problem, and it s not the resuls of the idiology of the government, cause in venezuela the government doesn t really control the economy, the private companies and the corruption are still controling it, and they capitalize all the income of the venezuelan people, the problem is that socialism can t survive if allow capitalist culture dominate the socity, and even the government was socialist since 2000 but it financiated the private companies but this way just make the riches more rich and didn t help the country, even the government did a lot for the people in health and education and habitat but it did the error to trust in capitalists that are the enemy of the revolution, cause the corrupts are everywhere and it s so easy to buy concience, the problem is social and cultural, the government must be more strict and controling but need honest and compromised men.

[jose chalhoub + 388]

with all due respect sir, you have to live in Venezuela to know for sure what you are saying and talking about. Venezuelan government destroyed the entire economy. Venezuelan state has the largest inflow of dollars due to oil exports, and not the capitalists and big corporations, all these depend on oil contracts, but venezuelan state controls the revenues. Period. And im making just a point of discussion of Venezuela and the OPEC. For me, personally, and since long, i was a proponent of Venezuela not being a member of this tricky organisation but to be an independent oil exporter, since all the religious and political intricacies and complexities especially between arab countries are entirely not in venezuela's tradition. 

[lahcene mebarek + 1]

I live in venezuela, and I know who are the enemies of the truth and social justice here, it s not the political system, egoists and traitors inside venezuela that can sell their patry and concience for their interests, and outside enemies that are looking for controling the natural resources of venezuela, it s the eternal conflict between good and bad, between social distribution of national fortune and wild capitalism between majority and minority, and fortunately venezuelans are peaceful and like life even so peaceful isn t always good but in this case it s saving lifes, better than fighthing people agains people for the interests of some economical and political scammers (los vivos). I don t kow way you don t like venezuelan relations with arabs or with the orient in general, maybe you prefer i will be slave of the occident better than friend with orient, just like colombia, but the good news that arabs are good positioned politically here even in the orositors side, and china and russia good positioned economically too, and usa will need to pay it expensive to deplace them, the only will need venezuelan people is to be more educated and will now the way to solve his problems, with socialism cause the big fortune and income is from natural resources so must fe propriety of all the nation and not controled by some persons or private companies.

[lahcene mebarek + 1]

8 hours ago, jose chalhoub said:

with all due respect sir, you have to live in Venezuela to know for sure what you are saying and talking about. Venezuelan government destroyed the entire economy. Venezuelan state has the largest inflow of dollars due to oil exports, and not the capitalists and big corporations, all these depend on oil contracts, but venezuelan state controls the revenues. Period. And im making just a point of discussion of Venezuela and the OPEC. For me, personally, and since long, i was a proponent of Venezuela not being a member of this tricky organisation but to be an independent oil exporter, since all the religious and political intricacies and complexities especially between arab countries are entirely not in venezuela's tradition. 

I live in venezuela, and I know who are the enemies of the truth and social justice here, it s not the political system, egoists and traitors inside venezuela that can sell their patry and concience for their interests, and outside enemies that are looking for controling the natural resources of venezuela, it s the eternal conflict between good and bad, between social distribution of national fortune and wild capitalism between majority and minority, and fortunately venezuelans are peaceful and like life even so peaceful isn t always good but in this case it s saving lifes, better than fighthing people agains people for the interests of some economical and political scammers (los vivos). I don t kow whay you don t like venezuelan relations with arabs or with the orient in general, maybe you prefer i will be slave of the occident better than friend with orient, just like colombia, but the good news that arabs are good positioned politically here even in the orositors side, and china and russia good positioned economically too, and usa will need to pay it expensive to deplace them, the only will need venezuelan people is to be more educated and will now the way to solve his problems, with socialism cause the big fortune and income is from natural resources so must fe propriety of all the nation and not controled by some persons or private companies.

[jose chalhoub + 388]

ok im not against good relations with arabs since my background is lebanese my parents were born there. and i think you deviated the discussion a little bit. I just posed a point for discussion, geopolitically and technically speaking and not a fait accompli but a scenario projection or a hypothesis and not that it will be that any time soon. Dont worry this space is for health and sane discussion...