LATEST IN BUSINESS : INDUSTRY LEADER

LATEST IN BUSINESS : INDUSTRY LEADER

VENEZUELA OIL INDUSTRY FACING NEAR COLLAPSE, INVENTORIES GO UP BY 84%

Venezuela, a founding member of OPEC and at one time the largest oil-producing nation of Latin America, has seen this vital industry see a near-collapse triggering an economic and humanitarian crisis in the country.

Adding to the woes are the US sanctions, which have led to an 84% increase in its stockpiles as buyers are keeping away. This means that the state-run PDSVA refinery will have to shut production again, harming the fragile economy more.

The storage facility at the Jose terminal and nearby facilities have almost doubled to 10.6 million barrels since the end of September. The country now has no more storage facilities and the state-owned Petroleos de Venezuela SA might have to shut wells. The last fuel loading was done on October 16 at the Jose terminal, a sharp contrast from a loading a day.

Venezuela was producing an average of 345,000 barrels of crude daily in July which has just marginally gone up to 383,000 barrels daily now. According to the Baker Hughes

According to the Baker Hughes September 2020 rig count, there are no operational drilling rigs in Venezuela.

September 2020 rig count, there are no operational drilling rigs in Venezuela. The stoppage of drilling activity and no new investments means that oil production could come to a complete standstill soon. Venezuela oil exports brought in only $22.5 billion in 2019 and it is sure to be much lesser in 2020.

Years of mismanagement, a tremendous lack of capital, and the steady outflow of skilled oil industry labor mean that the oil drilling infrastructure is collapsing.