Oil workers in an oil field at sunset. Photo: File photo.
Caracas, May 12, 2023 (OrinocoTribune.com)—In April, Venezuela’s oil production grew 7.4% compared to March, rising from 754,000 barrels per day (bpd) to 810,000 bpd, according to the monthly report of the Organization of the Petroleum Exporting Countries (OPEC).
According to the report published on Thursday, May 11, Venezuelan oil production in April was above 800,000 bpd, something not seen since December 2021, when an average of 871,000 bpd was produced. Since then, Venezuelan oil production had fallen to 669,000 bpd by the end of 2022, despite former Oil Minister Tareck El-Aissami’s promise of closing the year 2022 with 2 million bpd.
Newly appointed oil minister and president of the state-owned oil company PDVSA, Pedro Tellechea, said in February that Venezuela’s oil industry would grow during the first four months of 2023, but he did not promise any specific number.
Venezuela’s oil production expectations rose after the US oil multinational Chevron was authorized by the Biden government to resume the production and extraction of oil or derivatives through its joint ventures with PDVSA in November 2022.
Chevron the spoiled child
On November 26, 2022, the US Treasury’s Office of Foreign Assets Controls (OFAC) issued General License 41 (GL 41), authorizing Chevron Corporation to resume limited oil extraction operations in Venezuela, while leaving several other international oil corporations under the illegal US blockade.
PDVSA and Chevron signed oil-for-debt swap contracts in Caracas in December 2022 for the resumption of joint oil production. In 2022, Venezuela produced an average of 716,000 bpd, which represented an increase of 12.5% from 2021, when it averaged 636,000 bpd.
Under the agreement, Chevron aims to recover about $750 million in bad debts and dividends by the end of the year, and all of the outstanding $3 billion by the end of 2025. To date, it has recovered about $220 million, according to World Energy Trade.
This year, Chevron has reactivated crude production in its four joint ventures with PDVSA. It has exported an average of 102,500 bpd, and has participated in the acquisition of supplies. The company has also appointed new executives of the companies’ boards of directors, according to the World Energy Trade report.
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In a second phase, Chevron plans to boost crude production to 160,000 bpd this year and around 200,000 bpd in 2024. To optimize exports, the oil company has proposed helping Venezuela prepare a study on dredging the Lake Maracaibo navigation channel, which would allow it to load larger tankers, according to sources consulted by World Energy Trade.
Oil prices
According to Info Cifras TV, the average price of a barrel for 16 degrees API Merey crude, the Venezuelan referential blend, rose by $5.33 in April compared to March, to settle at $62.58.
However, according to OPEC, so far in 2023, the average price of the Venezuelan referential crude oil is $60.74 per barrel, $16.05 lower than the average price of 2022, which was $76.79.
This 21% drop is a sign of how complicated the oil market is for Venezuela, as the illegal sanctions imposed by the United States prevent PDVSA from exporting its products without impediment, forcing the company to sell at discounted prices and pay higher commissions.
Orinoco Tribune Special by staff
OT/JRE/SC
