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Eddie_lomax
Heavy Crude
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Joined: Dec 04, 2005
Posts: 186
Location: UK (Kent)
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 Posted: Sun Apr 23, 2006 4:47 pm Post subject: Is Venezuelan oil production collapsing ? |
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Just came across this interesting article from Stratfor during a google search on Venezuela oil production.
http://www.stratfor.com/products/premium/read_article.php?id=248553
Main excerpt from article
| Quote: | The government's official numbers on PDVSA simply do not add up when official crude oil production levels are compared with dollar revenues deposited by PDVSA at the Venezuelan Central Bank. Guerra argues that the discrepancy results from the government's failure to tell the truth about PDVSA's true crude oil production levels.
Guerra said May 16 that if the government's assertion that Venezuela is producing 3.3 million bpd is truthful, oil exports should be averaging at least 2.8 million bpd after netting out some 500,000 bpd of internal consumption. Based on an official average export price of $39.33 per barrel during first quarter 2005, this means Venezuela's oil export earnings during the first quarter should have totaled slightly more than $9.9 billion.
However, Energy and Mines Minister Rafael Ramirez, PDVSA's president, recently said PDVSA deposited only $6.43 billion at the central bank. This leaves $2.39 billion in oil export earnings unaccounted for -- if the government's official production figures are truthful.
The black hole at PDVSA could be even greater than Guerra estimates. Domingo Maza Zavala, the central bank's director, recently said PDVSA deposited only $4.8 billion at the bank during the first quarter, not $6.43 billion as claimed by Ramirez. Based on Guerra's estimates, this means $4.02 billion in foreign exchange that PDVSA should have earned during the first quarter went "missing" because it was not deposited at the bank. |
This does tally up with a comment Colin Campbell made about the result of the OPEC nations ending their accurate reporting of oil production. What we have now is a data storm, with companies resorting to counting tankers to estimate production with lots of poor quality data flowing around.
But here is a great metric for measuring production - money. Either there is record corruption, they are giving it away for free, or the production figures are not adding up.
This would explain todays oil prices much better than a 500,000 barrel a day drop in Nigeria.
Something else interesting from the article is the claim of 20-25% depletion rates - basically sounding like unmaintained fields just being left to go straight down to bubble point and beyond. If so then there is unrepairable damage being done today, although I'd like to see other reports to confirm this as it would be insanity to allow it to happen even for the shoddiest of outfits.
The money is talking here though:
| Quote: | | However, Petrobras, China National Petroleum Corp. and Repsol YPF SA are among the companies now being investigated for alleged tax evasion. |
Now either Stratfor are completely wrong, or there is some trouble there, in a world of plenty it seems odd that Chavez is pursuing his new allies for more money when he also wants foriegn investment - if thats how he treats his strategic friends then there is zero chance of the likes of ExxonMobile or BP risking a venture there. |
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grillzilla
Tar Sands
Joined: Mar 15, 2006
Posts: 78
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| Posted: Sun Apr 23, 2006 8:54 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| Quote: | | Something else interesting from the article is the claim of 20-25% depletion rates - basically sounding like unmaintained fields just being left to go straight down to bubble point and beyond. |
An interesting note here. Recently a drilling engineer from one of the companies that just had their Venezuelan operations nationalized was in my company office. I tried to pump him for info about the state of Venezuela's oil fields. He didn't have any info on depletion rates, but he did say that the level of expertise of the Venezuelan oil industry leaves a lot to be desired. To put it bluntly he felt they were not up to the task of holding production flat, much less increasing it.
Like a lot of the oil industry apparently Venezeula is suffering from a serious shortage of experienced technical people.
_________________
The difference between Genius and Stupidity is that Genius has its limits. |
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seahorse
Expert
Joined: Oct 15, 2004
Posts: 2256
Location: Arkansas
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| Posted: Sun Apr 23, 2006 9:05 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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Eddie,
Interesting article from Strafor. Do they have any articles on Saudi production or reserves? |
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Pablo2079
Heavy Crude
Joined: Jun 08, 2005
Posts: 329
Location: Cascadia
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| Posted: Sun Apr 23, 2006 9:33 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| Wouldn't be surprised if they are sending some of their production to Cuba. |
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miraculix
Heavy Crude
Joined: Apr 11, 2006
Posts: 144
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| Posted: Mon Apr 24, 2006 4:06 am Post subject: Re: Is Venezuelan oil production collapsing ? |
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Venezuela does several things that can partially explain the shortfall:
There are bartering contracts with several Latin American countries in place, i.e. PDVSA sends oil to Havanna and in return Cuba sends doctors and teachers to rural areas or the big city slums
Many countries have standing agreements with VZL to buy oil below market price
Even the US has received temporary low cost fuel during the last winter
I am not sure how these things factor in.
Corruption is certainly rampant I suppose. Chavez did replace the old hirachy of robber barons with his own goons. Not barring the fact, that under his rule the poor do benefit from his rule. He is buying his support of the masses. |
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SoothSayer
Light Sweet Crude
Joined: Mar 02, 2006
Posts: 1198
Location: England
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| Posted: Mon Apr 24, 2006 4:30 am Post subject: Re: Is Venezuelan oil production collapsing ? |
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You can't trust oil revenue figures for the third world.
Wasn't it Nigeria who doubled their production one year ... but the oil revenue accounts were almost a photocopy of the previous year?
I wonder how many new Mercedes were bough that year, using money from Swiss bank accounts?
Pragmatic methods like countiing oil tankers is going to much more reliable!
Or perhaps we should simply measure Daimler's sales figures, on a geographical basis??? |
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Eddie_lomax
Heavy Crude
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Joined: Dec 04, 2005
Posts: 186
Location: UK (Kent)
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| Posted: Mon Apr 24, 2006 12:52 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| seahorse wrote: | Eddie,
Interesting article from Strafor. Do they have any articles on Saudi production or reserves? |
Alas I don't know here as they only offer the odd article for free, they used to offer a free service years ago (and it was very good - a completely different slant on world news), now its something like 60 dollars a month.
I am tempted to subscribe though even with those high prices, maybe if I'm feeling rich  |
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Eddie_lomax
Heavy Crude
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Joined: Dec 04, 2005
Posts: 186
Location: UK (Kent)
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| Posted: Mon Apr 24, 2006 1:41 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| grillzilla wrote: | | Quote: | | Something else interesting from the article is the claim of 20-25% depletion rates - basically sounding like unmaintained fields just being left to go straight down to bubble point and beyond. |
An interesting note here. Recently a drilling engineer from one of the companies that just had their Venezuelan operations nationalized was in my company office. I tried to pump him for info about the state of Venezuela's oil fields. He didn't have any info on depletion rates, but he did say that the level of expertise of the Venezuelan oil industry leaves a lot to be desired. To put it bluntly he felt they were not up to the task of holding production flat, much less increasing it.
Like a lot of the oil industry apparently Venezeula is suffering from a serious shortage of experienced technical people. |
Thanks, its an eye opener, especially how they can screw up in a oily country like Venezeula, which seems to be forgotten with all the big news in the middle east. As others have said I guess they do have some barter and reduced price agreements going (196,000 barrels were promised Nov 2005 I read) cheaply, but that still leaves a vast gulf between bankings and the official production figures.
I can see Campbell is going to be busy here updating the model - hey wait a minute, in the 22nd newsletter he's got them down as 2.4 or so million barrels a day, looks about spot on there although that would be conventional only, maybe there is room for a big drop here |
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seahorse
Expert
Joined: Oct 15, 2004
Posts: 2256
Location: Arkansas
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| Posted: Sun Apr 30, 2006 12:14 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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Venezuela's oil production is dropping forcing it to buy Russian oil to meet financial obligations.
FT.Com |
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pup55
Expert
Joined: May 26, 2004
Posts: 3853
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| Posted: Sun Apr 30, 2006 5:47 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| Quote: | | official average export price of $39.33 |
This is the easiest number to lie about.
According to this source:
crude oil prices
.... their crude is heavier and cheaper than some others anyway. It's pretty common to have even lower grades that sell for a substantial discount. So, maybe their actual price was even less than publicly stated. |
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mekrob
Expert
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Joined: Dec 09, 2005
Posts: 2663
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| Posted: Sun Apr 30, 2006 5:51 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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| I can't wait until they aren't able to buy oil to sell. Then their official numbers will drop and the American media will say that Chavez is cutting us off even though we aren't doing anything to him. He's evil. Hitler. Stalin. Hussein. Bush could probably even convince the American people then that we have to invade to get a 'fair' share of the market. |
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pana_burda
Heavy Crude
Joined: Sep 11, 2007
Posts: 383
Location: In freefall speed right down to the claws of the devil
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| Posted: Fri Sep 14, 2007 1:59 am Post subject: Re: Is Venezuelan oil production collapsing ? |
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Yep ......., the new PDVSA lacks from those too (experts) but mainly is from HONEST people where the shortage is capitalised.
With "honest" people in, any problem becomes only a temporary one. Without them, all of the problems turn simply into chronically devastating ones. |
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coyotl
Tar Sands
Joined: Sep 02, 2007
Posts: 48
Location: Norway
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| Posted: Sat Sep 22, 2007 5:46 pm Post subject: Re: Is Venezuelan oil production collapsing ? |
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Too aggressive extraction methods damage the fields, have done so in Russia I read.
And Venezuela also disagrees with the Opec policy, they want a higher price.
I know that in Norway they are careful to ensure that the fields can produce for as long as possible. |
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