PDVSA production report: first semester 2009

24/09/09 | PDVSA's production in traditional areas has decreased to its lowest in 25 years. If production from strategic associations is added, it is the lowest in the last 20 years. The constant decline in operating drills, associated with expropriations and stoppage of activities in Western and Eastern Venezuela during the first 6 months of 2009, has resulted in a sustained drop in production that will hardly revert in the short term.

Venezuela's oil exports have decreased faster than production, given domestic substained increase in gasoline consumption (figures corroborated by international agencies' figures). However oil exports to the USA are dropping less than overall exports, which suggests that PDVSA tends to concentrate its sales in the US market. This is due, strictly, to revenue reasons, for production from strategic associations go, by design, to refineries in the USA, while PDVSA is capitalising on CITGO's retail distribution chain to maximise profits from refined products.

In the meanwhile, the USA is diversifying its energy sources and is less dependent on Venezuelan oil exports. US imports of Venezuelan oil have halved in the last decade. In conclussion, the US is less dependent on Venezuelan oil while Venezuela is ever more dependent on exports to the USA.

Read Ramon Espinasa's report here.