Quico says: The US Department of Energy’s well regarded Energy Information Administration has just put out its latest Country Analysis Brief on Venezuela. After acknowledging methodological and opacity concerns (even they can’t figure out what “other liquids” means!) the EIA estimates that, in 2007, Venezuela was producing about 2.7 million barrels of oil and associated products per day (2.4 million b/d of crude oil, 300,000 b/d of condensates and natural gas liquids).
EIA estimates domestic consumption reached 740,000 b/d. That would leave 1.95 million b/d left over for export, but that’s not the total that actually gets paid for: Petrocaribe and Cuba (which have two separate agreements) get 170,000 b/d, and China has preferential terms as well, alongside the ad hoc deals Chávez has cut with the likes of Joe Kennedy and some hard-up African countries.
Overall, then, we’ll be getting actual, up-front cash on maybe 1.71 million b/d worth of exports: higher than my 1.35 million b/d estimate of a couple of weeks ago, but almost a million barrels below the chavista Official Line.
Here’s a little summary of what’s been happening these last two years, following EIA’s numbers:
On these numbers, Central Bank exaggerated Venezuela’s oil exports to the tune of almost $40 billion last year. And the year-on-year fall in oil revenues would top $33 billion if oil prices stay where they are today.
EIA’s numbers would yield this Export Revenue table for 2009:
Which means Chávez needs oil prices to more than double (from $35 to $85) just to hit his budget targets. And that may actually be optimistic: it assumes that PDVSA has managed to stem the decline in production since 2007. But there’s a lot of circumstantial evidence to the contrary.
My inbox has been registering a greater than usual volume of emails from despondent oil industry folk saying PDVSA is way, way behind on its payments to contractors. The trend hit the newswires yesterday when PDVSA physically took over Ensco’s only drilling rig in the country. Apparently, Ensco got tired of asking nicely for PDVSA to pay its bills, shut down the rig pending payment and, well…the rest is a wire story, as they say.
Stories like that are a dime a dozen in the oil industry these days, as PDVSA devotes scarce resources to intervening in the parallel exchange market instead of paying its contractors. Dow Jones reports that PDVSA has not paid its contractors since August and is trying to “renegotiate” its debts to them, angling for a retroactive 40% discount on their accounts payable…classy!
And here’s a final thought: just a few months ago Mark Weisbrot wisely opined that “there does not appear to be any basis for the claim that Venezuela’s oil exports are overstated by PDVSA” citing as evidence a single EIA table showing OECD oil (and oil product) imports originating in (but not necessarily produced by – think re-exports) Venezuela. Given that these updated figures, from the very same source, flatly contradict his assertion that Venezuela is exporting at least 2.62 million b/d, should we expect a note correcting the earlier mistake? Isn’t that what you’d expect from a researcher who is independent and not affiliated to any government?
My breath is not held.