Global Energy Review

Venezuela

Venezuela's crude-oil production is in decline. Production is now around 2.3 mn bpd, though this is supplemented by some 0.7 mn bpd of heavy crude, Orimulsion, and NGL. Much of any increase in Venezuela's output is likely to come from these latter sources.

Conventional crude-oil production is now well below Venezuela's OPEC quota of 2.8 mn bpd, and is even below Venezuela's theoretical crude-production capacity of 2.6 mn bpd. A steady decline is likely despite Venezuela's apparently healthy reserve levels and reserves-production ratio. Figures for reserves and production are especially sensitive as far as Venezuela is concerned, given its inability at present to produce up to the limit of its OPEC quota, and the corresponding pressure from other members for Caracas to give up some of its quota to enable other countries to increase theirs.

A further difficulty for Venezuela is the impact on the oilfields of political unrest and strikes by oil workers during 2003. These may have had some adverse effects on the production capacity of older fields. A much more serious problem, however, is the lack of investment in recent years in Venezuela's productive capacity. Well before the strikes, Petróleos de Venezuela (PDVSA {http://www.pdvsa.com}) did not have enough rigs in operation to sustain output in many of its larger fields. The three main western fields - Bachaquero, Lagunillas, and Tía Juana - have been declining since 1995, when production in the western region was just over 1.6 mn bpd. In July 2003, output was reported below 0.9 mn bpd, though it has risen a little since then.

The situation in the east is not much better. Output in late 2003 was around 1.3 mn bpd, according to unofficial estimates (the government claimed a higher figure). It does look nevertheless as if the eastern fields have little potential for any production increase over the longer term owing to the previous neglect of reservoir management. Decline looks likely from 2005. This really only leaves the heavy-oil belt to provide any significant increase in future years. Heavy-oil production is 0.5 mn bpd, to which may be added a further 0.2 mn bpd of NGL. The heavy oil is upgraded into a lighter, synthetic crude. It is also produced in association with foreign companies that have the resources to go on raising output. There are also some attractive areas still available for conventional crude exploration, but much foreign interest is now focusing on natural gas.

Production Outlook

PDVSA plans to be producing about 5 mn bpd in 2010. It is difficult to see how this target can be achieved with so many conventional oil fields in decline.

Crude-oil production is forecast as follows:

2003 2.3 mn bpd
2010 1.9 mn bpd 1

Iran, Reserves & Production, 2003

Reserves: 77.8 bn bbl
Reserves remaining: 80.9 years
Production capacity: 2.60 mn bpd
OPEC Quota (Nov ’03): 2.82 mn bpd
Production: 2.25 mn bpd
Consumption: 0.45 mn bpd
Net trade: 1.80 mn bpd
Peak output 3.70 mn bpd
Peak year 1970

Production 1991-2003

Production 1991-2003

OET Archive

External links

 

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