VENEZUELA'S OIL PRODUCTION DOWN

EIA -  Venezuela's crude oil production has been on a downward trend for two decades, but it has experienced significant decreases over the past two years. Crude oil production in Venezuela decreased from 2.3 million barrels per day (b/d) in January 2016 to 1.6 million b/d in January 2018. A combination of relatively low global crude oil prices and the mismanagement of Venezuela's oil industry has led to these accelerated declines in production.

Several factors indicate that Venezuela's crude oil production will likely continue to decline. The number of active rigs has fallen from near 70 in the first quarter of 2016 to an average of 43 in the last quarter of 2017. Recent reports indicate that missed payments to oil service companies, a lack of working upgraders, a lack of knowledgeable managers and workers, and declines in oil industry capital expenditures have also contributed to production declines.

Venezuela produces extra-heavy crude oil in the Orincoco Oil Belt area and heavily relies on imports of lighter liquids (diluents) to blend with this crude oil to make it marketable. Financial difficulties recently have occasionally prevented the state-owned oil company, Petroleos de Venezuela SA (PdVSA), from importing the necessary volumes of diluent to sustain production and exports.

In addition to falling production, refiners in the United States and Asia have reported crude oil quality issues with imported crude oil from Venezuela, resulting in requests for discounts or discontinuation of purchases.

In EIA's Short-Term Energy Outlook, Venezuela's crude oil production will continue to fall through at least the end of 2019. Crude oil production losses are increasingly widespread and affecting joint ventures. With the reduced capital expenditures, foreign partners are reducing activities in the oil sector. Venezuela's economy is heavily dependent on the oil industry, and production declines result in reduced oil export revenues. Venezuela's economy contracted by nearly 9% in 2017, based on estimates from Oxford Economics.

EIA considers production declines in Venezuela to be an expected decline—the production declines have been forecasted by EIA for some time. As a result, EIA's Short-Term Energy Outlook estimates of historical unplanned production outages among the Organization of the Petroleum Exporting Countries (OPEC) do not include OPEC-member Venezuela's production declines.

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Earlier:

2018, March, 12, 08:30:00 VENEZUELA'S RATINGS DOWN MOODY'S - Moody's Investors Service has downgraded the Government of Venezuela's foreign currency and local currency issuer ratings, foreign and local currency senior unsecured ratings, and foreign currency senior secured rating to C from Caa3. Concurrently, the foreign currency senior unsecured medium term note program has also been downgraded to (P)C from (P)Caa3. The outlook has been changed to stable from negative.

2018, January, 15, 09:45:00 VENEZUELA'S OIL UP REUTERS - Venezuela’s oil production has increased to near 1.9 million barrels per day (bpd) after hitting a historic low last year, according to Manuel Quevedo, oil minister and head of state oil firm PDVSA, who vowed 2018 will see output rise to more than 2.4 million bpd.

2018, January, 10, 12:45:00 VENEZUELA'S OIL DOWN TO 1.7 MBD PLATTS - Venezuelan crude output plummeted in December to 1.70 million b/d, according to the latest S&P Global Platts OPEC survey released Monday.

2018, January, 8, 19:20:00 U.S. - VENEZUELA SANCTIONS U.S.DT - “President Maduro and his inner circle continue to put their own interests above those of the Venezuelan people,” said Treasury Secretary Steven T. Mnuchin. “This action underscores the United States’ resolve to hold Maduro and others engaged in corruption in Venezuela accountable. We call on concerned parties and international partners around the world to join us as we stand with the Venezuelan people to further isolate this oppressive regime.”

2017, November, 22, 11:25:00 РУССКИЙ ДОЛГ ВЕНЕСУЭЛЫ: $3.15 МЛРД. МИНФИН РОССИИ - Сумма консолидированного долга Венесуэлы составила 3,15 млрд. долл. США, новый график погашения задолженности предусматривает платежи в течение 10 лет, объем которых в первые 6 лет минимален.

2017, November, 17, 19:45:00 RUSSIA - VENEZUELA RESTRUCTURING $3 BLN FT - Russia has come to the aid of Venezuela with a deal to restructure $3.15bn of sovereign debt, allowing Caracas to meet obligations to other creditors and underlining Moscow’s role as the crisis-hit country’s main foreign backer.

2017, November, 7, 12:15:00 VERY IMPORTANT VENEZUELA The step to restructure debt comes as Venezuela stands to receive more revenue for its oil. The country’s crude oil basket price rose to CNY350.75 ($52.90) a barrel Friday, the highest since July 2015. And Venezuela did approve a $1.1 billion principal payment on a PDVSA bond on Thursday.