A Review of the Nigerian Energy Industry

Venezuela sets new oil production target

23 August 2012, Sweetcrude, HOUSTON – OPEC-member Venezuela has outlined production goals for its prized Orinoco heavy oil belt, saying the region would yield four million barrels per day by 2019.

Venezuela President Hugo Chavez, who is seeking reelection this fall, disclosed this as he reasserted that state oil giant Petroleos de Venezuela, PDVSA, was the bedrock of his self-styled socialist “revolution” and the Orinoco area was the centerpiece of the company’s future plans, Dow Jones reported.
If Chavez wins the coming 7 October vote, his new six-year term would end in 2019.

Chavez is unapologetic about PDVSA’s deep involvement in his political platform. And on
Tuesday, in a display of confidence in his coming election victory, the president extended the appointment of Rafael Ramirez, head of PDVSA and Venezuela’s energy minister, for six more years.

“PDVSA belongs to the people,” the news wire quoted Chavez as saying during a televised appearance broadcast from the oil-rich region.

The Venezuelan president said the Orinoco belt would produce more than 1.3 million barrels a day by the end of 2012, up from 1.2 million barrels a day.
Chavez also envisions new urban and industrial areas sprouting up in the area, which stretches along the eastern Orinoco River Basin.

In the next six years, Chavez said PDVSA would be adding 100,000 additional workers and would attract $100 billion in new investment destined for the region.

The 58-year-old former army officer has previously pledged to increase Venezuela’s oil production to 3.5 million barrels a day by the end of 2012 up from 3 million barrels a day.

Detractors of Chavez, however, point out that his government has chronically failed to meet the often ambitious output goals during his 13 years in office with production actually slipping by many estimates. Opponents of the president contend that PDVSA has been starved of its own revenue, which has been diverted to finance Chavez’s many social initiatives.

Chavez also announced that later this week, the first “Petrorinoco” bonds would be unveiled. The new debt, backed by dividends from a 4% stake of oil joint ventures, will pay for an increase of severance benefits for the public sector.

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  • Like Nigeria, Venezuela has always talked about lofty crude oil production targets. In this instance, we would like to say that we will better appreciate this target when it is accomplished.