Venezuela: Although current production figures are still in dispute, almost all signs point to continued production slumps.
"Quite apart from what happened in the strike, in the coming months we are going to see production declines resulting from five years of underinvestment," says economist Robert Bottome of the business magazine Veneconomy.
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Venezuelan wells face annual decline of 25 percent, meaning that PDVSA must have an average of 55 drilling rigs active at any given time to make up for lost output in older wells.
Baker Hughes' rig count shows between 30 and 40 active drilling rigs -- at a time when Venezuela is trying to make up for production lost during the strike.
In addition, contractors indicate noticeable declines in work-over rig activity, which spells considerable future declines in production, especially in western Venezuela's mature fields.
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Furthermore, Venezuelan authorities now insist on including upgraded synthetic crude as part of petroleum production figures, whereas Venezuela previously categorized synthetic crude as bitumen and therefore not part of quotas. While Venezuela used to understate its production figures, now it is doing its best to inflate them.
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But no matter who is heading Venezuela's government next year, it looks like oil production for this crucial OPEC member cannot go anywhere but south.
Full article:
Houston Chronicle, October 27
Oil firings in Venezuela take toll down the line
By BRIAN ELLSWORTH
chron.com |
