Venezuela: Maduro Celebrates Rising Oil Production After Years of Slump | International

A group of children play in the P of a PDVSA poster in the streets of Caracas on January 2.
A group of children play in the P of a PDVSA poster in the streets of Caracas on January 2.Matias Delacroix (AP)

Venezuela once again reaches a production of one million barrels per day of oil and the Government is breastfeeding after a drastic fall in recent years. The Minister of Petroleum of Venezuela, Tarek El Aissami, has declared that the downward trend has been reversed, “despite the threats of the criminal blockade” imposed by the United States on the Government of Nicolás Maduro. The president himself celebrated the increase in an interview with Spanish journalist Ignacio Ramonet, broadcast on state television last Saturday. In this way, the Government considers that it is meeting the goal that it had set for last year after the historic collapse of these years of economic and political crisis, which put local production at just 350,000 barrels per day in 2020. Venezuela , traditionally one of the world’s energy powers, had a historic production of an average of three million barrels per day.

The official information has been received with caution by analysts and independent observers, and in some cases directly denied, although no source denies that the recovery in production is a fact, and that the country is probably approaching the one million barrels per day zone. towards the month of February.

High prices, and an undeclared policy of easing sanctions by the United States, have allowed Caracas to trade its oil with a little more comfort, and are the basis, in part, of the small relief from the country’s dramatic economic situation after the collapse of the Maduro stage.

Rafael Quiroz, an economist specialized in the matter and a postgraduate professor at the Central University of Venezuela, assures that the country approached 800,000 barrels per day in December, and that the recovery is due, in part, to the alliance with the Government of Iran, which has provided Venezuela with naphtha and diluents to reactivate the extra-heavy oil wells in the Orinoco Belt production area. “This despite the fact that there are many inconveniences due to the quality of the crude oil that is being diluted. The situation of the Venezuelan oil industry continues to be dramatic. We have not reached a million barrels. Minister El Aissami is deliberately lying right now, ”he says.

“The increase is real, but it is the result of opening what is called closed production, with a limited investment. Production had fallen due to international sanctions, but not local production capacity ”, explains specialist Francisco Monaldi, international consultant and professor at the Institute for Higher Studies in Administration (IESA). “A new well has not been drilled in a year and a half. Basically we are returning to the production levels of the beginning of 2020 ”.

Monaldi maintains that Minister El Aissami, and the current president of PDVSA (state oil company), Asdrúbal Chávez, have built a sophisticated system to evade international sanctions, trade crude oil, and receive, above all, aid from Tehran, whose government is one of the geopolitical allies of Caracas. The current increase in crude oil production has also materialized, thanks to the reactivation of some projects with China and the American Chevron, which has a special permit from Washington to continue operating in the country.

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“Some reports report that on certain days one million barrels have been reached, but this is a consequence of the incorporation of these condensates that have been bought from Iran,” adds the expert.

Maduro has said that the goal for 2022 is to reach two million barrels a day, a horizon that experts consider very remote if international sanctions are not lifted. “Venezuela is reaching the ceiling of its production, which has certainly been increasing, but with a capacity that has a limit,” says Monaldi. “Increasing it requires heavy investments, drilling new wells and then maintaining them. We’ll see. It is true that the current high prices give the Government a margin and help it. Production is going up and it can go higher, no doubt, but I don’t think it will be too much. It would also be necessary for the Chinese to be encouraged to make new investments with PDVSA ”, he adds.

Before international sanctions, Venezuelan oil production averaged 1.5 million barrels a day. The once powerful national oil engine was used by Hugo Chávez (who died in 2013) to base an aggressive diplomacy that sought to broaden the political spectrum of the Bolivarian revolution in Latin America, in the context of the “multipolar” strategy that sought to place counterweights to the Washington’s interests in the region.

The politicization of its objectives, the departure of qualified personnel, and corruption during the administrations of Rafael Ramírez, Alí ​​Rodríguez Araque and Eulogio del Pino at the head of Petróleos de Venezuela (PDVSA), produced the progressive decline of what was considered society The most powerful mercantile company in Latin America, according to América Economía magazine, and, in the long run, laid the foundations for the national economic collapse of the last six years.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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