LATE-STAGE SOCIALISM: Venezuela’s National Oil Company On Its Last Legs.

Venezuelan refineries are operating significantly below operational capacity, a product of a lack of investment and maintenance, as well as a lack of technical knowledge (a lot of the highly qualified personnel from PDVSA who rebelled against Hugo Chavez’s regime in 2002 were fired and now work in various other countries, such as; Colombia, Mexico, Canada and the USA). Falling output at refineries means that Venezuela needs to import gasoline, further squeezing the national budget. Refineries are currently working at less than 40 percent of average 2016 levels as state-run oil company PDVSA is importing between 100 and 150 thousand barrels per day of gasoline and between 80 and 90 thousand barrels per day of diesel.

Venezuela’s daily demand for gasoline and diesel are 225 and 170 thousand barrels respectively. Several tankers are waiting off the coast of Venezuela to discharge cargoes as the PDVSA has difficulties in paying their shipping bills, resulting in a penalty of $26 000 per tanker per day. An almost surreal paradox in a country that owns twenty refineries; five in Venezuela and fifteen worldwide.

In the last ten years, Venezuela crude oil production has lost more than 500 thousand barrels per day. Since the beginning of 2017, the country has lost 92 thousand barrels per day. Between May and June 2017, Venezuela’s oil crude production has decreased from 1,951 to 1,938 million barrels per day, representing 13 thousand barrels lost in one month, based on the secondary sources used by OPEC.

“Bad luck.”