Venezuela’s devastated Oil Industry is in no condition to replace Russian production

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Senior U.S. officials’ surprise trip to Venezuela last weekend drew mixed reactions in both countries. But if the point of the outreach was to replace Russian oil and help hold down the price of gas, then the trip had little chance of success.

By ForbesMaria Abreu

Mar 8, 2022

“Venezuela can’t contribute much, its oil industry is destroyed,’’ José Toro Hardy, a prominent Venezuelan economist told Forbes. By Toro Hardy’s figuring, it would take about $250 billion of investment and seven to eight years to bring Venezuela’s production back to its former levels–it stood at 3.5 million barrels a day (bpd) in 1998. “Major foreign investment is needed, and it can’t reach the country if the country can’t commit to restoring democracy,’’ he added.

Venezuelan President Nicolás Maduro claims that the country currently produces about 1 million barrels of crude oil a day but an OPEC report shows that in January, the production was about 668,000 bpd. In December 2018, shortly before the Trump Administration cut off oil imports from Venezuela as a sanction against Maduro’s regime, the U.S. was importing around 200,000 bpd of crude oil from Venezuela.

The U.S. now needs to figure out how to replace the 245,000 bpd of crude oil it was importing from Russia, should it decide to cut off purchases.

The surprising weekend meeting in Caracas got a mixed reception from supporters and opponents of Maduro’s regime in Venezuela and the U.S. Maduro had expressed support for Russia shortly after its invasion of Ukraine, and when the U.N.’s General Assembly voted overwhelmingly last week to condemn the invasion, Venezuela didn’t vote.

After Saturday’s meeting with U.S. representatives, however, Vice President Delcy Rodríguez called for dialogue between Russia and Ukraine on national television, seemingly softening the government’s initial Russian support. Maduro also encouraged Venezuelans to move past the political issues dividing them. “If we’re encouraging international dialogue, we have to set the example here,” Maduro said on national television.

Read More: Forbes – Venezuela’s devastated Oil Industry is in no condition to replace Russian production

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