Maduro: We are ready to send oil wherever they want it. But Europe …
Earlier this year there were high hopes that the US would lift sanctions on Venezuela due to oil shortages and rising prices due to the Russian invasion of Ukraine, allowing the black gold to return. to flow from the South American oil giant. Unfortunately this has not yet happened. Although some concessions have been made for the oil trade, Venezuela's statement to the world is clear: it is ready to pump and export huge quantities of crude whenever given the chance.
No matter how many times the US government rejects Venezuelan demands to end sanctions and fill the supply gap left by Russian energy sanctions, the South American oil major will not give up on its attempt to increase crude oil exports. President Madero said this week that Venezuela is ready to resume oil production and export it to the rest of the world whenever it has the opportunity. On the occasion of an event held during the visit of the OPEC Secretary General to Caracas, Maduro stated that "Venezuela is ready and willing to play its role and supply, in a stable and secure way, the oil and gas market. which the world economy needs “.
The country's dictator has allayed fears that the Venezuelan oil industry is far from recovering, after years of low production and poor investment. Currently, production is around 700,000 bpd compared to 2.3 million bpd two decades ago and which, potentially, over time, could be reached again. This is due to US sanctions imposed on trade in Venezuelan crude, which previously provided around 96% of the country's revenue.
In May, President Biden made some concessions to sanctions, allowing Venezuela to export oil to Europe for debt. Italian firm Eni and Spanish oil company Repsol have been cleared to ship Venezuelan crude oil to Europe in an oil-debt swap, helping to bridge the gap in the region. It was not the change that Venezuela was hoping to achieve, but it did give more optimism for more concessions to be made in the following months.
In August, however, Maduro decided to suspend oil shipments in exchange for debt to Europe, declaring that he wanted refined fuels from Eni and Repsol in exchange for crude oil instead of the current agreement. In recent months, Venezuela has had many difficulties in finding refined fuels, with many refineries in a state of neglect. To meet its needs, it has already exchanged crude oil for condensate with Iran, bypassing US sanctions on the two countries. If Venezuela could import more refined oils, it could better support the recovery of the oil industry, with several operations requiring diluents to continue. So far Europe has not accepted this request, once again leaving a gap in supplies.
But how much oil potential does Venezuela have? The South American oil giant has the largest crude reserves in the world, accounting for around 18.2% of the world's oil barrels in 2016. Although current production is low due to sanctions, Maduro believes the country could rapidly increase its producing several hundred thousand barrels of oil per day, but this would require stability and long-term investment. What the country lacks.
Broken equipment, abandoned oil fields and a lack of talent are just some of the challenges energy experts highlight as obstacles to achieving long-term manufacturing success. This, coupled with political uncertainty, has deterred many oil companies from investing in the region, despite the abundance of reserves. Currently, the US oil major Chevron, the Italian ENI and the Spanish Repsol continue to operate in the country, while others, such as ExxonMobil, have withdrawn following the sanctions imposed on the sector.
Could Venezuela ease the burden of an eventual exclusion of Russian oil from Europe? In theory, yes, but Venezuela is also in close ties with Cuba, Russia and China. Do you really want to help Europe?
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The Maduro article: we are ready to send oil wherever they want it. But Europe… comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/maduro-siamo-pronti-a-inviare-petrolio-ovunque-lo-vogliano-pero-leuropa/ on Mon, 19 Sep 2022 20:27:00 +0000.