Oil production by Venezuela’s PDVSA may have started to improve, with the state-owned oil and gas producer reporting that production in the country is averaging 1.5 million barrels per day, as reported by Reuters.
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As reported by OilPrice.com, according to OPEC secondary sources, Venezuela’s oil output fell to 1.34 million barrels per day in June, which, excluding a strike in 2002-2003, put production at its lowest point in almost seven decades.
As previously reported by FOX Business, the crisis in Venezuela can be attributed to the country’s socialist leaders overspending for years. Then, when oil prices collapsed, the drop in revenue made it impossible to keep the house of cards standing.
Now, oil prices have recovered and the country’s economic collapse has left it unable to capitalize.
Further, PDVSA President Manuel Quevedo confirmed to Reuters on Tuesday that it is in talks with ConocoPhillips following its efforts to seize some PDVSA assets in the Caribbean.
Conoco won court orders allowing it to seize certain PDVSA assets in in the Caribbean to collect on a $2 billion arbitral award linked to Hugo Chavez’s 2007 nationalization of Conoco assets. Lack of investment in Venezuela’s oil industry is also being attributed to the production collapse.
If Conoco were to seize the assets, it could disrupt Venezuela’s oil export chain.
According to data from the U.S. Energy Information Administration, Venezuela’s oil production has been on a steady decline since 1997 and the pace of the decline has recently accelerated. In 1997, Venezuela was producing about 3.2 million barrels of oil per day. Production hovered around 2.5 million barrels per day from 2002 to 2015, and then slumped, hitting 1.6 million barrels per day in January 2017.
Even if Venezuela’s oil production is starting to see signs of life, it will take a lot to rescue. The International Monetary Fund in late July said that as the country’s economic crisis worsens, inflation in the nation could swell to 1 million percent by the end of 2018.