The Barrel recently gave a presentation about supply trends, and likened the formal Venezuelan statements on the country's production to the proclamations of Baghdad Bob, the Iraqi government spokesman who would declare that "there are no American infidels in Baghdad!" even as TV cameras would record the movements of US troops off in the distance, right over his shoulder.
The Venezuela government repeatedly claims production of well over 3 million b/d, which nobody believes. Platts' latest monthly survey of OPEC production, released July 11, shows Venezuelan output at 2.4 million b/d. Other independent estimates are in line with that.
So it was significant Friday that at a speech in Cartagena, Colombia, Alvaro Perez, the director of the Venezuela Oil Chamber, told the audience that Venezuela's "real" oil output is somewhere between 2.6 and 2.8 million b/d. That certainly is above the Platts' estimate, and we stick to that number. And while the chamber is not a government entity, it doesn't operate in a vacuum; it's reasonable to expect that such honesty is not particularly welcome in Caracas.
So maybe Mr. Perez had to fudge his numbers a bit higher than the Platts' estimate. Regardless, it's a pretty good internal look at what has happened to output in a country that ten years ago was producing 3.15 million b/d, and at that time was more than 700,000 b/d above its OPEC quota. Today, it can't even produce its OPEC allotment of a little more than 3.2 million. It doesn't even come close.
But whatever the actual barrel count, it's a lot less than 3.3 million b/d, which had been the country's goal for 2007. In April, Luis Vierma, the director of exploration and production for Pdvsa, said the country had lowered its goal to 3 million b/d. But he cited as the reason for that drop OPEC-mandated restraint. He didn't cite the country's lingering impact from its strike several years ago, nor the fact that western investors have either folded their tent or stuck around with probably little intention of spending any more than the bare minimum. (To be fair, at the time of the Vierman declaration, the decisions by ConocoPhillips and ExxonMobil to give up their stakes in the Orinoco belt were not yet known).
The trends in Venezuela make it likely that it is going to be a long time before the 3 million b/d threshhold is crossed again.
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