"Putting aside the huge political and legal issues, the question I have fielded boils down to this: What will this mean for energy prices? With an estimated 303 billion barrels of proven reserves, roughly 17% of the world's total supply, Venezuela has the largest oil reserves on the planet. But here's the catch: Having oil and actually getting it out of the ground profitably are two very different things."
"Although Venezuela was one of the five founding members of the Organization of the Petroleum Exporting Countries (OPEC) in 1960 (the other four were Iran, Iraq, Kuwait, and Saudi Arabia), its oil production has collapsed dramatically since peaking at 3.5 million barrels per day (bpd) in the 1970s, which at the time represented over 7% of global oil output. In the early 2000s, the country still produced around 3 million bpd, but that amount fell below 2 million during the 2010s,"
After the capture and arrest of Venezuelan President Nicolas Maduro, President Donald Trump announced plans to revitalize Venezuela's oil industry with American investment. Venezuela holds an estimated 303 billion barrels of proven reserves, roughly 17% of the world's total supply. Having large reserves does not equate to profitable extraction and production. Venezuelan oil production peaked at 3.5 million barrels per day in the 1970s and has fallen to about 1 million bpd today, roughly 1% of global output. About three-quarters of the oil is heavy and sour, which complicates extraction and refining. The oil infrastructure has been degraded by decades of under-investment and mismanagement. Rebuilding will likely take years and requires enormous capital investment and legal frameworks that protect foreign contracts.
#venezuelan-oil-reserves #oil-production-collapse #heavy-sour-crude #infrastructure-under-investment
Read at www.mercurynews.com
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