IEA: Venezuela stems production decline
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The good news for cash-strapped Petroleos de Venezuela, the state oil company, is that it has halted its slide in crude production for the time being.
The International Energy Agency’s February market report says PDVSA’s average daily production in January was about 2.4 million barrels, slightly better than the previous month.
Output has been trending down since an oil workers strike in 2002, when Venezuela’s oil production was as high as 3.4 million barrels a day. The bad news is that PDVSA will be closing for at least a couple of months one of the heavy-oil pumping facilities in the so-called Orinoco Belt oil field in eastern Venezuela, a closure that could cost the company 6% of its current output.
Another question mark is the impact of PDVSA’s decision to stop shipping all oil and derivatives to ExxonMobil in retaliation for the U.S. oil giant’s successful court bid to freeze up to $12 billion in PDVSA’s global assets. The two companies are enmeshed in a fight over compensation for an ExxonMobil field that Venezuela nationalized in June.
It is not immediately clear if and when PDVSA can find a market for the crude and other products it now will not be shipping to ExxonMobil. Meanwhile, the price of oil jumped to above $95 a barrel in Thursday trading as markets sorted out the impact of the ExxonMobil-PDVSA conflict as well as better-than-expected U.S. and Japanese economic data.
-- Chris Kraul in Caracas