Venezuela cannot send “one more barrel” of oil to other countries, experts warn

Venezuela is not in a position to send “one more barrel” of oil to any country, as President Nicolás Maduro recently suggested, because production is still low and is “stagnant” and “compromised,” warn experts in the energy sector.

President Nicolás Maduro said last week in an act on the occasion of the visit to Caracas of the secretary general of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, that the country is “ready” to export oil and gas to the markets of the United States and Europe “in a stable and safe way”.

According to Maduro, whose legitimacy as president has been challenged by 50 governments around the world, including the United States, Venezuela’s oil production has been recovering “substantially” after falling to historic lows due to “years of disinvestment and lack of maintenance” in the oil industry. industry.

In August, Venezuela produced an average of 723,000 barrels of crude per day, according to its reports to OPEC. In the second quarter of the year, it averaged 745,000 barrels per day.

Maduro theoretically cannot have access to these markets due to the economic sanctions imposed by the US, warns the economist and researcher of the oil sector Rafael Quiroz, but says that, in addition, production is not enough.

“[Maduro] says that Venezuela is ready to sell the oil it wants to the United States, Canada and Europe, when it knows very well that, of those 670,000 barrels, the annual average, we do not have one more barrel to send to anyone,” Quiroz assured the voice of america.

Quiroz explains that Venezuelan production “is stagnant” and, in turn, most of the quota is “committed” to traditional clients of the Chavista government, such as China and India, with “very few” barrels sent to Spain, the Caribbean and Central America.

“As long as Venezuelan production doesn’t pick up, we can’t send another barrel to anyone,” he insists. “We can have as many barrels underground as we want, but they don’t come out on their own.”

Venezuela produced an average of just over 3 million barrels of crude before the rise to power of the late former President Hugo Chavez, Maduro’s mentor, in 1999.

The oil industry, key to more than 90% of the national Gross Domestic Product, deteriorated as a result of the expropriation of outsourced companies in the sector, allegations of corruption, the dismissal of thousands of workers due to a political purge, and the lack of investment and maintenance due to part of the state, as Maduro admitted last week.

“A political statement”

Eugenio Montoro, former manager of the Morón Petrochemical Complex of the state-owned company Petróleos de Venezuela (PDVSA), describes Maduro’s offer of crude oil and gas to North America and Europe as “a political statement” that would seek to harbor hopes in investors and voters.

In his opinion, the production of crude oil is part of a long list of pending issues so that the State can revive the economy, which is “a frank disaster.”

“Gross Domestic Product went down 80% (in eight years). Germany’s GDP fell 45% in World War II, and here, without war or anything to justify it, it fell almost twice as much,” says the oil specialist in conversation with the VOA.

Montoro believes that Maduro’s statements about the foreign energy market do not change the reality that exists, in his opinion, in the oil fields of Venezuela.

“The situation in the industry is so serious and there is such a strong abandonment of production fields and refineries, that it is like starting over” to prepare production from scratch, he says. Foreign investors who might come to the country would have to finance “a very slow rise in oil production” in the immediate future, he warns.

Raising oil production from 700,000 to a million barrels per day would take at least a year, according to his calculations. “There are no miracle stories here,” he pointed out.

Key role of Venezuela?

The Secretary General of OPEC said during his visit to Venezuela that the country will play “a key role” in the world energy market in the future.

Venezuela co-founded OPEC six decades ago, but its role in the organization has diminished as its share of production has lagged behind other nations, essentially those in the Arab world.

Quiroz underlines that “in OPEC, the one who speaks the loudest and can hit the table is the one who produces the most oil. Venezuela will be able to make itself felt in OPEC to the extent that it can strengthen its production. Meanwhile, the voice within the organization will be like a voice that is almost forgotten. Wishes are one thing and myths are another thing”, he emphasizes.

Al Ghais, elected last January as OPEC secretary for the next three years, reiterated his condemnation of international sanctions against Venezuela and defended his role so that the world oil market works “efficiently.”

Authorities from the Venezuelan oil world, such as Minister Tareck El Aissami, sanctioned and criminally persecuted by the United States, have said that the South American nation is only waiting for the White House to resume its energy cooperation.

Quiroz thinks differently. “It is time for the national government to stop believing that with 670,000 barrels of production per day, Venezuela is still key or fundamental in the international oil market. Nothing more out of reality, ”he added.

OPEC expects world oil demand to grow by 3.1 million barrels per day this year and another 2.7 million barrels per day in 2023, according to Al Ghais.

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