Venezuelan energy production has risen to 850,000 b/d of oil and 4.5 Bcf/d of natural gas since the lifting of US sanctions a year ago, but obstacles remain, top industry officials told Argus last week.
The short-term production goal is 1mn b/d, Venezuelan vice minister for hydrocarbons Erick Perez said on the sidelines of a Venezuela oil chamber conference in Caracas, but it depends heavily on a steady flow of diluent to blend with extra heavy oil from the Orinoco region.
"Once we can have it in volume and quality, the goal is achievable," Perez said.
Venezuela produced roughly 680,000 b/d of crude a year ago, according to Argus estimates.
US producer Chevron has been bringing in more cargoes of naphtha and condensate for state-owned oil company PdV to use as diluent, according to shipping data, but the industry needs more, Perez said. Shipments from Iran, which provided a lifeline in recent years when US sanctions were in full force, have all but disappeared.
Venezuela is now receiving an average of $65/bl for its oil, Perez said. Venezuela has stopped officially reporting its crude basket prices, but sources last year estimated it was receiving about $60/bl.
Unreliable power service also remains an issue, particularly in Zulia state, Perez said. Any small fluctuation in power can curtail oil well operations.
But overall oil and gas production has increased in 2023, in large part because of the White House relaxing many of the sanctions imposed during the administration of former US president Donald Trump, allowing Chevron to resume work on its four joint ventures (JVs) with PdV.
The Petro Piar JV in the Orinoco is producing about 80,000 b/d, according to Perez. Petro Independencia, also in the Orinoco, is producing around 25,000 b/d. In Zulia state, the Petro Boscan JV is now at 60,000 b/d — or 65,000 b/d on a good day, according to Perez — while the Petro Independiente JV is at 3,000 b/d.
Perez declined to comment on reports from sources that Chevron is seeking to exit Independiente.
"In Zulia we have managed to open a closed field, Boscan, and that is crude that Chevron is placing in the North American market," Perez said.
And natural gas that was once flared is now being produced and sold, PdV vice president for gas Luis Gonzalez said.
For many in Venezuela's oil industry the turnaround since last year is both surprising and encouraging, as the four JVs that were practically mothballed a year ago are now sending thousands of barrels per day to the US. "I for one can't believe it's been a year already," oil chamber president Enrique Novoa told Argus. "We just hope that this business model [with Chevron] can be applied in other associations."
Offshore Eni and Repsol operations at the Cardon IV project are producing 580mn cf/d gas and 17,000 b/d of much-needed condensates.
"And we are carrying out a seismic-data offshore project that could put us in fifth place of proven natural gas reserves, worldwide," Gonzalez said.
