Venezuela’s oil production fell to an average of 1.392 million barrels per day in May, down another 42,000 bpd from a month earlier, according to OPEC’s secondary sources. However, with the crisis in Venezuela spiraling out of control at a horrific pace, the numbers from May might as well be a year ago.
The May numbers don’t reflect the full ramifications of having to deal with inadequate port capacity, after PDVSA diverted operations to Venezuela from its Caribbean island refineries and storage facilities following the attempt by ConocoPhillips to take control of them.
The problem of export capacity has become so acute that PDVSA is demanding customers send ships that can handle ship-to-ship loadings, since there is a backlog of ships trying to load up at the country’s decrepit ports. PDVSA is even considering declaring force majeure on contracts that it will be unable to fulfill. The upshot is that PDVSA might have only 694,000 bpd available for export in June, which is less than half of the 1.495 mb/d that it is contractually obligated to deliver this month.
To be sure, upstream operations are in crisis mode. But the bottlenecks at storage facilities and the ports have opened up a whole new crisis.
Elizabeth Torres is outraged, but as a Venezuelan she takes the affront in her stride. “We are a country of millionaires,” she says ironically, eyeing a carton of eggs in the market. Price? Three million bolivars.
“You are a millionaire because you have to pay that much, and for that you get 36 eggs, but the minimum salary is 2.6 million! With what you get every month, you can’t buy them,” she says.
It’s the great irony of the country’s cruel decline. Sitting atop the world’s largest reserves of crude, Venezuela — once Latin America’s richest country — is now a state of millionaires, but the millions are in bolivars and practically worthless.
According to the country’s leading universities, 87 percent of the population is now officially poor.
“They’ll turn us all into beggars ’cause they’re easier to please.”