Following an easing of sanctions by the US against Venezuela, a number of analysts polled by Bloomberg have come to the conclusion that the country could increase its production of crude oil by 25%, potentially helping to alleviate the relatively tight oil market, although how quickly this may happen remains unclear.
Despite having the world’s biggest proven oil reserves, oil production is just 800,000 barrels per day (bpd) after years of sanctions. Following an agreement between President Nicolas Maduro and opposition figures to potentially hold elections next year, the US Government has temporarily approved transactions with the Venezuelan oil and gas industry through a six-month general license. The renewal of this license is contingent upon the Maduro Government meeting its commitments in a roadmap for holding elections. The license allows oil or gas from Venezuela to be produced, lifted, exported and sold, and it permits goods and services to be provided and invoices to be paid.
Venezuela Oil Chamber member and PDVSA contractor, Alexis Medina, said about the ability of the state-owned PDVSA to increase oil production:
“We can easily add 200,000 barrels a day to 250,000 barrels a day, because we have the infrastructure already in place. History proves this.”
In recent months, Chevron has been the only western oil major that has been allowed to operate fields in Venezuela and export crude oil thanks to a special authorisation. Here at TrAchem, we stock Chevron’s lubricant products, like the Texaco URSA heavy-duty engine oil, so speak with our helpful team to learn more.