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Hector Andrade, PDVSA’s managing director, announced the company's intentions during the 22nd World Petroleum Congress in Istanbul.
As the Venezuelan company’s representative said, the production will thus increase from 1 million barrels per day to 2.5 million barrels by 2025.
Venezuela is one of the countries hit by the fall in oil prices since mid-2014. By the end of 2016, Venezuela produced more than 2.4 million barrels of oil and condensates per day.
Oil production in Venezuela has already suffered due to low prices and low investment in the country, having decreased by 253 thousand barrels per day in the period from 2010 to the end of 2015. And the continuing unfavorable investment environment in the country only aggravates this trend, as foreign operators refuse to drill in Venezuela.
Venezuela’s reserves mainly consist of heavy grades of oil, and they are particularly sensitive to changes in oil prices. Not only these reserves are becoming unattractive compared to other investment options, but they also require greater investment than light grades of oil do.
As of April, oil production in Venezuela was 1.956 million barrels per day, which is 10% lower than last year. It fell by more than 17% compared to the level of 2015.
With the reduction of half of oil revenues, the budget deficit of Venezuela sharply increased. President Nicolas Maduro could cut costs and increase taxes, but these steps seemed unacceptable to President.
According to various estimates, the cost of oil production in the basin of the Orinoco River is $ 35-45 per barrel. At the same time, Venezuela sold its oil at preferential prices, that is, at a loss.
Instead, Venezuela included a printing press to pay bills. Hyperinflation has further undermined the national economy.
Thus, oil in Venezuela has turned into a source of crisis and impoverishment. An economy’s strong dependence on hydrocarbons is always dangerous.
In October 2016, Maduro signed a budget for 2017 in the amount of almost 8.4 trillion bolivars (with official rates of the dollar from 10 to 660 bolivars, and the "black market" rate of over 1 thousand bolivars). Over 73% of budget expenditures will be spent on investments in social spheres, President assured then.
The budget assumes the price of oil at the level of $ 30 per barrel. "We have established the moderate and low cost of a barrel of oil, but we know that the price will be restored (at a higher level)", the President said.
source: reuters.com
As the Venezuelan company’s representative said, the production will thus increase from 1 million barrels per day to 2.5 million barrels by 2025.
Venezuela is one of the countries hit by the fall in oil prices since mid-2014. By the end of 2016, Venezuela produced more than 2.4 million barrels of oil and condensates per day.
Oil production in Venezuela has already suffered due to low prices and low investment in the country, having decreased by 253 thousand barrels per day in the period from 2010 to the end of 2015. And the continuing unfavorable investment environment in the country only aggravates this trend, as foreign operators refuse to drill in Venezuela.
Venezuela’s reserves mainly consist of heavy grades of oil, and they are particularly sensitive to changes in oil prices. Not only these reserves are becoming unattractive compared to other investment options, but they also require greater investment than light grades of oil do.
As of April, oil production in Venezuela was 1.956 million barrels per day, which is 10% lower than last year. It fell by more than 17% compared to the level of 2015.
With the reduction of half of oil revenues, the budget deficit of Venezuela sharply increased. President Nicolas Maduro could cut costs and increase taxes, but these steps seemed unacceptable to President.
According to various estimates, the cost of oil production in the basin of the Orinoco River is $ 35-45 per barrel. At the same time, Venezuela sold its oil at preferential prices, that is, at a loss.
Instead, Venezuela included a printing press to pay bills. Hyperinflation has further undermined the national economy.
Thus, oil in Venezuela has turned into a source of crisis and impoverishment. An economy’s strong dependence on hydrocarbons is always dangerous.
In October 2016, Maduro signed a budget for 2017 in the amount of almost 8.4 trillion bolivars (with official rates of the dollar from 10 to 660 bolivars, and the "black market" rate of over 1 thousand bolivars). Over 73% of budget expenditures will be spent on investments in social spheres, President assured then.
The budget assumes the price of oil at the level of $ 30 per barrel. "We have established the moderate and low cost of a barrel of oil, but we know that the price will be restored (at a higher level)", the President said.
source: reuters.com
