Venezuela’s oil production once topped 3 million barrels a day in the late 1990s. It later fell sharply because of poor investment, mismanagement, and US sanctions. In recent months output has hovered between 1.1 million and 1.2 million barrels a day, with a small rise after Maduro’s removal.
But US Energy Secretary Chris Wright on Tuesday said that the oil deals expected to be signed in Caracas by American and foreign companies should more than double the country’s crude output over the coming years.
Wright was on his second one-day visit to the founding OPEC member since US seized Venezuelan leader Nicolas Maduro in January.
Can New Oil Deals Send More Venezuelan Crude to the US?
Venezuela’s oil shipments are set to shift in the coming period as many oil projects switch to updated contract rules. Under the new terms, PDVSA’s partners can sign their own supply deals and sell their portion of the oil on their own, according to Reuters.
A major production agreement recently unveiled by the Venezuelan government, the US administration, and American firm North American Blue Energy Partners is also expected to send more Venezuelan crude to the United States, the report said.
Wright also said that American gasoline prices are likely to drop in the next few weeks due to the easing of rules for refiners. He explained that the new investments should greatly increase oil supply and help push prices lower, but noted that limited refining capacity remains the main problem for gasoline and diesel costs right now.
How Venezuela Oil Exports Held Steady in August Despite Loading Delays
Venezuela shipped almost the same amount of oil in August as the month before, averaging 1.17 million barrels a day. Higher sales to India and Europe made up for a drop in deliveries to the United States, which is normally its biggest buyer.
More tankers waited longer to load last month. The delays came from rundown terminals run by state company PDVSA and problems with the quality of the crude.
According to the Reuters report, a power blackout in late July that shut down all of PDVSA’s upgrading and blending plants made the situation worse. These hold-ups are slowing US hopes of raising Venezuela’s oil exports quickly.
Major trading firms such as Vitol and Trafigura kept their export volumes almost unchanged at about 597,000 barrels a day, only a small drop from July’s 604,000. US oil company Chevron sent slightly less, moving 286,000 barrels a day compared with 293,000 the previous month.
Shipments to the United States averaged 553,000 barrels a day, well below July’s high of 786,000. Sales to India jumped 66 percent to 297,000 barrels a day, while exports to Europe nearly tripled to around 260,000 barrels a day.
Venezuela also brought in more fuel last month, about 166,000 barrels a day, mostly US naphtha used to thin its very heavy crude. That was more than double the 81,000 barrels a day imported in July.