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Venezuela could add 400,000 bpd to oil output if U.S. approves licenses -petroleum chamber

Commodities Mar 11, 2022 02:26PM ET
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© Reuters. An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas, Venezuela January 29, 2019. REUTERS/Isaac Urrutia
 
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By Mayela Armas

CARACAS (Reuters) - Venezuela's oil output could rise by at least 400,000 barrels per day (bpd) if the United States authorizes requests by state-run PDVSA's partners to trade Venezuelan crude, the country's petroleum chamber said on Friday.

The increase would allow the OPEC member's oil production, which in January averaged 755,000 bpd according to official figures, approach some 1.2 million bpd, said the president of Venezuela's Petroleum Chamber, Reinaldo Quintero.

U.S. officials met Venezuelan President Nicolas Maduro last weekend and demanded the country supply at least a portion of oil exports to the United States as part of any agreement to ease oil trading sanctions imposed on the country since 2019.

"With the capacity we have, we can add 400,000 bpd", Quintero said in a press conference.

The move could first benefit companies like Chevron Corp (NYSE:CVX) that have pushed for authorizations and revamped licenses to trade or swap Venezuelan oil.

In 2021, the country halted a free fall in its oil production and exports to reach 636,000 bpd of output, a 12% increase from the previous year.

Even if oil sanctions on Venezuela are eased only for certain transactions, the country could ultimately add 1 million bpd of production, depending on capital injections allowed and trust by the parties in the dialogue, he said.

Experts have been less optimistic on the forecasts, as an urgent need for drilling rigs and massive capital is putting a ceiling on any increase of production, which is reaching capacity.

Years of underinvestment, mismanagement and, more recently, U.S. sanctions on PDVSA have hit Venezuela's oil production, which in the late 90s reached some 3.7 million bpd.

Small oil service firms that accepted partial debt payments and a key swap deal with Iran providing needed diluents to produce Venezuela's flagship exportable grades helped PDVSA last year to reanimate output, but the country has yet to reach 1 million bpd of monthly output.

Venezuela could add 400,000 bpd to oil output if U.S. approves licenses -petroleum chamber
 

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Comments (3)
Robert Murphy
Robert Murphy Mar 11, 2022 3:15PM ET
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Is Venezuelan oil cleaner than Texan oil? Does it burn less CO2? Im confused here. What am I missing here? We are going to enrich another dictoator?
Peter ONeill
Peter ONeill Mar 11, 2022 3:15PM ET
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US oil production is at almost full capacity and it would take 4-5 years of investment and major political decisions to increase from current levels (e.g. Keystone Pipeline). If the USA could produce more oil overnight - it would have done it 12 months ago to ease inflation levels. The only countries with extra capacity to replace Russian supply would be the UAE / Saudi / Iran and Venezuela.
Mag Ke
Mag Ke Mar 11, 2022 3:15PM ET
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Peter you are hilariously wrong.
Nasser Hefny
Nasser Hefny Mar 11, 2022 3:15PM ET
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I think it's production cost. AMERICA want cheap oil. And it's not economically visible to invest in high cost production of domestic oils unless you totally sure that the prices will stay high for a long long time.
Hunt Richardson
Hunt Richardson Mar 11, 2022 2:36PM ET
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Venezuelan oil is thick and expensive to extract and process. not the wholesalers favorite
James Pattison
James Pattison Mar 11, 2022 2:35PM ET
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North dakota was doing 500,000 more bpd under the last admin… what changed? This is bidens dum war on energy independence…
Brad Albright
Brad Albright Mar 11, 2022 2:35PM ET
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You are uninformed. Biden has approved more leases and more oil is pumping than under Trump. You may despise Biden because he beat your guy like a drum, but you need to get your facts straight.
Ryan Penna
Ryan Penna Mar 11, 2022 2:35PM ET
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Peter ONeill
Peter ONeill Mar 11, 2022 2:35PM ET
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Maybe you didn't get the memo on a pandemic called Covid19?? A lot of oil wells were capped in early 2020 and it can take 2 years to uncap them. Add in a lot of the oil companies froze new drilling and exploration for 12+ months due to the hit on their revenues - and it led to a GLOBAL supply issue with oil companies only now recovering to pre covid levels (globally!!)
 
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