Venezuela 2023 oil output to remain flat: Tellechea

Market: Crude oil, Natural gas
24/07/23

Venezuelan oil production will likely remain near the current 830,000 b/d level for the rest of 2023 and not reach the previously touted 1mn b/d mark, energy minister and state-owned PdV president Pedro Tellechea said last week.

In a recording of a presentation given to the Federation of Venezuelan Industrialists guild on Friday, Tellechea said oil production is averaging 831,000 b/d this year and is expected to reach 860,000 b/d in July, an admission an earlier 1mn b/d goal cannot be reached.

"Surely we are behind, but I don't have a magic wand, by year end we will achieve one million oil barrels per day," he said. Production "has to be sustainable. You can't reach one million barrels a day and then have that number drop down. That's abnormal."

Most outside sources report lower monthly production figures for the country. Argus estimated Venezuelan production in June at about 760,000 b/d.

Tellechea said PdV plans to more than double existing production in 2024 to 1,760,000 b/d through the reactivation of mothballed oil wells.

In his presentation, Tellechea described a Venezuelan energy industry in deep disarray after years of US sanctions and the corruption of the PdV-Crypto scandal. When he took over PdV in January "... there was a supplier overcharging us 400pc for oil well chemicals," Tellechea said. "That boy now is in a different situation. We can't allow that, because that is the heritage of all Venezuelans. We have regrettably arrested a lot of our own officials too. We can't keep on allowing that."

Sanctions are also impeding certain operations, Tellechea said. Gas compressor plants in Zulia state require reengineering, for example, but since they use US technology, reaching agreements with the equipment license holders "have proven impossible."

Tellechea said that when he took over as chief executive of state-owned petrochemical business Pequiven four years ago — a title he still holds — plants such as the Hugo Chavez petchem complex had been "completely stripped" of equipment.

PdV plans sign its first licenses to export natural gas by the end of the year, despite limited natural gas production and no export or import infrastructure. The country will soon also end subsidies for natural gas in the domestic market, he said.

"We need to become natural gas exporters," Tellechea said. Export licenses for condensates and natural gas liquids were issued in May.

By Carlos Camacho

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