An oil extraction pump in Venezuela’s Zulia state. (Source: Shutterstock)
Venezuela’s oil production suffered under the watch of its so-called “socialist” leadership, and despite production growth of recent, the OPEC country is battling to break through a ceiling of what is seemingly 800,000 bbl/d.
Venezuela’s ability to break through the production ceiling will depend on a number of factors, including further easing of U.S. sanctions, which could spur additional investments. But, based on the direction of the current political spat between Washington and Caracas, Venezuela’s breakout moment may still be years away, if it happens.
Lost production between 1999 and the likely average this year of 734,000 bbl/d is on track to reach 2.07 MMbbl/d, according to data compiled by Hart Energy from OPEC monthly and annual reports.
In 1999, Venezuela’s late president Hugo Chávez inherited production of around 2.81 MMbbl/d. This compares to peak production of 3.23 MMbbl/d in 1997, two years prior to the leader taking office.
Venezuela’s production losses are a whopping 2.49 MMbbl/d over a quarter of a century, when taking into account the years beginning in 1997.
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Considering the oil prices spike during this time period, the lost revenue potential is nothing short of massive and probably even harder to swallow for leaders and citizens alike. The lost income coupled with political instability led to Venezuela’s great migration and the departure of over 7 million citizens in recent years.
U.S. oil sector sanctions imposed in 2019 by the Trump administration aren’t the only reasons why Venezuela’s production has sunk so low. Widespread oil sector corruption and a lack of investments are also part of a complicated equation.
