Amid The Hunger And Riots, Only Bad News For Venezuela's Oil Industry

[thackney]

Amid The Hunger And Riots, Only Bad News For Venezuela's Oil Industry
https://www.forbes.com/sites/ellenrwald/2017/08/17/amid-the-hunger-and-riots-only-bad-news-for-venezuelas-oil-industry/#31507d164513

While Venezuela has become a humanitarian and economic mess, it is worth looking at the one industry the Chavez and Maduro regimes relied on to bring wealth to their socialist country. With utter neglect of existing private industries like agriculture, and with reallocation of resources and wealth through centralized planning, the Venezuelan government has managed to bring hunger to its people. Venezuela became dependent on oil when it did not need to. Now, it does not have even enough money to pump that oil reliably.

As a member of OPEC, Venezuela has committed to OPEC’s current production quotas, and since the start of 2017 it has been limited to producing an average of 1.972 barrels of oil per day (called its allocation number). As recently as the beginning of the year, Venezuela was capable of producing in excess of this limit, and it did so for the first two months. However, it seems that since March Venezuela has not been able to produce even at its OPEC allocation number.  Venezuelan oil production is at a 27 year low.

Venezuela has the largest proven oil reserves in the world, but much of that oil is difficult to access. Furthermore, Venezuela has failed to maintain its facilities well and the finances of the government and the national oil company, PDVSA, are so abysmal that they cannot afford to fully run production. A country rich with energy resources has problems powering its own infrastructure....

[thackney]

https://www.nytimes.com/2017/08/17/opinion/venezuela-trump-maduro-military-threat.html

...Venezuela, with possibly the world’s largest oil reserves, had a chance to become one of South America’s leading democracies. Mr. Maduro turned the country into an economic basket case and himself into a dictator. He modeled himself on his left-wing predecessor, Hugo Chávez, with excessive public spending that, coupled with mismanagement and falling oil prices, was unsustainable. The inflation rate for 2017 is estimated at 720 percent, and it is believed that 80 percent of Venezuelans live in poverty, some suffering from malnutrition and full-scale hunger. More than 120 people have died in several months of protests demanding Mr. Maduro’s removal. Some analysts fear outright civil war....

[thackney]

Venezuela crisis: Zoo animals stolen and eaten amid food shortages
http://www.independent.co.uk/news/world/americas/venezuela-crisis-zoo-animals-stolen-eaten-food-shortages-nicolas-maduro-a7898006.html
8/17/2017

Zoo animals in Venezuela are being stolen and eaten as the country sinks further into a food shortage crisis, local police have said.

The Zulia Metropolitan Zoological Park in the city of Maracaibo reported that more than ten species of animals had gone missing from the facility in recent weeks.

Officers said they “presumed” the buffalo, tapirs and collared peccaries - small pig-like mammals - had been stolen for food.

Leonard Nunez, the head of the zoo, said he believed the animals had been stolen by drug dealers who later sold them on the black market. “They take everything here,” he told local reporters.

At the end of July it was reported that up to 50 animals had starved to death at Caricuao Zoo in Caracas this year because they had not eaten for weeks....

[dfwgator]

Trying to give a damn.............nope can't do it.

[Sanguine]

And, if I understand correctly, the oil industry may not be able to recover from the neglect and abuse to the infrastructure.

[thackney]

And, if I understand correctly, the oil industry may not be able to recover from the neglect and abuse to the infrastructure.

I would say it can recover there, given a significant political change.  However, damage done in the fields will mean oil that was economically recoverable will be stranded.

[thackney]

Trying to give a damn.............nope can't do it.

Venezuela oil output is large enough to raise global oil prices as the exports fall.