According to production figures published by OPEC, Venezuela’s state-owned oil company Petróleos de Venezuela, S.A. (PDVSA), continues to have a record-breaking year, and not in the way they would hope. In April, the socialist government in control of the world’s largest oil reserves failed to have its oil company produce at a rate any higher than it did 70 years ago.
This April, PDVSA output averaged 1.436 million barrels per day (bpd) — its lowest production level since 1949. Furthermore, in October, a Venezuelan tanker collided with the country’s primary oil port, causing a delay in delivery of five million barrels of crude. PDVSA has already struggled with capacity issues this year after Conoco-Phillips enforced a court ruling awarding it $2 billion in compensation for assets seized when Venezuela nationalized two of its projects.
US sanctions have contributed to a general glut of funds necessary to make repairs and resume shipping. The sanctions are certainly not the cause of Venezuela’s troubles, but they provide a convenient scapegoat for the Maduro regime. For his part, the president of Venezuela has sought the help of the People’s Republic of China, which is not bound by the restrictions imposed by the sanctions.
China has pledged $5 billion in support of the Venezuelan state and its floundering oil industry. In addition, President Maduro plans to boost oil exports to the People’s Republic as a part of a larger plan to get the Venezuelan economy back on its feet by boosting oil production by one million bpd from its June average this year.