Venezuela was producing oil at about 2.6 million barrels per day in 2015. OPEC estimates Venezuela produced 1.278 million barrels per day in July. This is down from 2.15 million barrels per day in 2016 and 1.91 million barrels per day in 2017.
Analysts expect Venezuela’s oil production to fall to below 1 million bpd by the end of 2018.
Venezuela has signed a US$430 million joint service agreement with seven companies that they hope will help them to increase its crude oil production by 641,000 barrels per day. Others have estimated it will cost about $10 billion per 100,000 barrels per day of production restoration.
$430 million will do nothing to stem
Problems moving what is being produced with port closures and asset seizures
The closing of a dock at Venezuela’s main oil export port could delay as much as 5 million barrels in crude deliveries to Russian company Rosneft, further complicating oil-for-loan agreements between state-run PDVSA and Rosneft.
PDVSA has fallen behind on its export contracts this year, raising the prospect of temporary cancellation of shipments under force majeure if it cannot recover production and export capacity.
Venezuelan production in July fell to its lowest level in over 60 years because of a lack of investment, legal disputes with creditors and sanctions imposed by the U.S. government on PDVSA.
Also, oil workers are starving along with the rest of the country. Many are fainting from lack of food. Workers are leaving their jobs and taking trucks and key equipment. This is further complicating the problem of keeping the oil facilities operational.