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PDVSA Oil down 378MBD & 680 MBD off plan 2007

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    Charles Randall

    Venezuelan oil output down 378,000 bpd in three years

    According to the Ministry of Energy and Petroleum, oil production in the Orinoco belt is to double in 2012 (File Photo)



    Caracas, Monday Jan 7, 2008
    The domestic oil production figures are increasingly lower than the target set in state-run oil holding Pdvsa’s Oil Sowing Plan
    The Oil Sowing Plan -the Venezuelan state-owned oil giant Pdvsa’s business plan up to 2012- made no significant progress in 2007.
    Excluding the completion of the first stretch of the Trans-Caribbean Gas Pipeline and the first phase of a plan to overhaul Cuba-based Camilo Cienfuegos refinery, the major long-term goal of the Oil Sowing Plan -namely increasing domestic oil output to 5.83 million bpd- is quite far from fulfillment.
    Based on the projects Pdvsa trumpeted in 2005, domestic oil production was supposed to average 3.51 million bpd in 2006 and climb to 3.75 million last year.
    In fact, as of 2004 -following a production peak at 3.45 million bpd after a two-month oil strike- the industry has been unable to stop a downward trend in production. According to the figures of the Gross Domestic Product (GDP) disclosed last December by the Central Bank of Venezuela (BCV), in 2007 oil production was 3.07 million bpd.
    Consequently, in 2007 oil production was 680,000 bpd lower than the goal set under the Oil Sowing Plan for last year, and was 430,000 bpd (12.2 percent) lower than the estimates of the Venezuelan 2007 budget. Further, it means that oil output dropped 173,000 bpd compared to 3.25 million bpd pumped in 2006, based on Pdvsa’s audited financial statements. Such a decline came despite the fact that in 2007 the state conglomerate made unprecedented investments exceeding USD 10 billion.
    While the Oil Sowing Plan sets forth an average oil production increase of 465,000 bpd, since 2004 net domestic oil output has tumbled 378,000 bpd because of exogenous and endogenous factors.
    Such variables include OPEC’s moves to cut production in order to counter escalating prices since 2002, with Venezuela among the member countries that have shown interest in reducing output. Another factor was the process to migrate businesses with private firms to joint ventures where the Venezuelan State holds a majority stake, which involved disinvestment in the areas of exploration and production.
    In mid-2007, Minister of Energy and Petroleum and CEO of Pdvsa Rafael Ramírez claimed, “There are no delays in the Oil Sowing Plan.” He stressed that the projected increase in production would be nourished by production in the Orinoco Oil Belt in the future. Only in this area, production capacity is supposed to grow from 620,000 bpd to 1.23 million bpd in 2012 -a 99 percent increase.
    In 2006, Pdvsa’s tax and social contributions amounted to USD 39.2 billion, or 70.9 percent of domestic revenues.
    Last July, Ramírez estimated such contributions in 2007 at USD 32.9 billion -16 percent lower than in the previous year.
    However, such figure is likely to have soared in the last quarter, as the Venezuelan oil basket price averaged USD 65.20 in 2007 -an increase of 15.7 percent in comparison to 2006.

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