How far can Venezuela fall?

[J Owens + 45]

Can anyone clarify just how far Venezuelan production can really fall? I'm seeing a lot of these gloom and doom reports but surely stopping production is a lose-lose for PDVSA, investors and importers? I know the country may be on the brink of collapse but one would think the oil rigs will be the very last thing to stop.

Nick Cunningham appears to be painting a pretty dull picture here: https://oilprice.com/Energy/Energy-General/Venezuela-Could-Lose-A-Lot-More-Oil-Production.html - Am I missing the point?

[Petar + 76]

Yes, Venezuela is going downhill. Yesterday, really unexpected and surprise move of president Maduro who tapped general of Army - Manuel Quevedo  to lead PDVSA and oil ministry, showing us intention and desperate attempt of Venezuela's authorities to fight against their political opponent and taking full control on PDVSA. Why? First of all, in last 120 days more than 50 officials at PDVSA have been arrested. Many of them are not on Maduro's side. If we know that 90% of Venezuela 's export revenue comes from this part of industry, it's clear that we are talking about Maduro's try to establish military control over main areas in PDVSA and money flows. Major general Quevedo is the first military official who has been named for such an important function in the past 15 years. His appointment should concern foreign oil companies in Venezuela like Chevron, Rosneft etc. Venezuela has about $60 billion foreign debt in bonds, and half of that have been issued by PDVSA.

 

 

[Pavel + 384]

Morning. Yeah. Thing's in that country are going down. Is Venezuela the biggest threat to oil industry in 2018? Many will say yes. And I think they're right. Venezuela is dealing with the whole world today, and the country has been in economic recession for years. Corruption, state crime and the absence of democracy are leading this oil-rich country to the edge ... Maduro is pushing them down. https://europeansanctions.com/category/venezuela/

[Rodent + 1,424]

23 hours ago, J Owens said:

Can anyone clarify just how far Venezuelan production can really fall? I'm seeing a lot of these gloom and doom reports but surely stopping production is a lose-lose for PDVSA, investors and importers? I know the country may be on the brink of collapse but one would think the oil rigs will be the very last thing to stop.

Nick Cunningham appears to be painting a pretty dull picture here: https://oilprice.com/Energy/Energy-General/Venezuela-Could-Lose-A-Lot-More-Oil-Production.html - Am I missing the point?

Venezuela is on the imploding-trajectory, yes. And oil production has been steadily declining as it can't seem to get a handle on what should be a huge cash cow, because someone's been dipping dirty hands into the PDVSA cookie jar. But will oil production in Venezuela drop to nothing? Doubt it. Holding the largest oil reserves in the world, I'm pretty sure if PDVSA can't keep it together enough to get it out of the ground, someone else will do it for them. The world isn't going to sit by forever and watch the biggest oil reserves in the world go to waste.

[TomTom + 183]

3 hours ago, Rodent said:

Venezuela is on the imploding-trajectory, yes. And oil production has been steadily declining as it can't seem to get a handle on what should be a huge cash cow, because someone's been dipping dirty hands into the PDVSA cookie jar. But will oil production in Venezuela drop to nothing? Doubt it. Holding the largest oil reserves in the world, I'm pretty sure if PDVSA can't keep it together enough to get it out of the ground, someone else will do it for them. The world isn't going to sit by forever and watch the biggest oil reserves in the world go to waste.

Can you give any specific numbers here Rodent?

[Rodent + 1,424]

1 hour ago, TomTom said:

Can you give any specific numbers here Rodent?

Indeed I can! While there are many sources of how large Venezuela's oil reserves are, almost all sources agree that Venezuela is top dog.

a) Worldatlas pegs Venezuela's proven reserves at 300 billion barrels. This is about 35 billion barrels more than Saudi Arabia's, which is in the #2 spot.

b) Geab.eu has calculated Venezuela's proven oil reserves at 297 billion barrels as of 2013. 

c) Rystad Energy in 2016 claimed that the US took over the top spot at 264 billion barrels saying that Russia holds 256 billion and Saudi 212 billion.

d) The EIA has Venezuela's oil reserves in the top  spot at 298 billion barrels (2014).

As for Venezuela's oil production, according to OPEC secondary sources, production is as follows:

2012 average = 2.359 million bpd (steady)

2013 average = 2.353 million bpd (steady)

2014 average = 2.373 million bpd (steady)

2015 average = 2.368 million bpd (steady)

2016 average = 2.157 million bpd (here we start falling off the cliff...)

Q1 2017 avg = 2.002 million bpd (falling... falling...)

Q2 2017 avg = 1.964 million bpd (ahhh!!!!!)

Q3 2017 avg 1.931 million bpd 

Steadily falling, falling, until the last data we have which is Oct 2017 production of 1.863 million bpd. 

The production declines are not a blip, or even a series of blips--it's a free fall.

 

 

[Selva + 252]

Although Venezuela is head over heels in debt, even the US companies have their capital in oil industry there, Maduro is still sending  blackmailing messages.  

https://oilprice.com/Geopolitics/South-America/Maduro-Venezuela-Could-Stop-Crude-Oil-Sales-To-US.html 

Will the US lose "Venezuelan oil" ? 

[TomTom + 183]

This guy even called Trump 'dude'  :-)

[Rodent + 1,424]

1 hour ago, TomTom said:

This guy even called Trump 'dude'  :-)

That was my favorite part