Barron’s: OPEC & China Stats On Venezuela – No Oil Cash Left?

Cash-strapped Venezuela did not publish oil production numbers for July.

But OPEC’s latest stats on Venezuela show two important things, according to lawyer, banker and editor Russ Dallen’s missive today. The head of Caracas Capital and editor of the Latin America Herald Tribune writes:

” … by Venezuela’s own submitted count, its oil production has fallen from 2.587 million barrels per day (bpd) at the start of the year to 2.364 million bpd by the end of June … an admitted decline of 223,000 bpd in 6 months. … OPEC calculates Venezuela’s fall in production from January to July as 259,000 barrels per day lost. Second, that OPEC calculates that Venezuela barely produced over 2 million bpd in July.

While 2.095 million bpd is nothing to shake a stick at for most countries, that is down from 3.5 million bpd when Venezuela President Hugo Chavez was elected in 1998. More importantly Saudi Arabia, which has lower oil reserves than Venezuela, is producing 10.477 million bpd…”

OPEC estimates for July oil production, based on secondary sources, show  big declines in Venezuela, Nigeria and Libya. (Larger image available.)

The monthly OPEC data based on direct communication with producer countries is incomplete, and shows increases for those countries that reported. The data from OPEC, using ‘secondary sources,” estimates Venezuela production slipped 40% in July, and that Nigeria’s oil production took a bit hit as unrest in the country’s oil-producing south shuttered facilities. Production in Libya was also lower, while that in Saudi Arabia, the United Arab Emirates and Iran was higher.

China is also in the mix, Dallen notes:

” … as PDVSA’s [state-run Petroleos de Venezuela] financials also reveal, Venezuela sent an average of 579,000 bpd to China in 2015 to repay the $65 billion that China has loaned Venezuela … China has already paid for that oil with $65 billion in loans to Caracas and Venezuela has already spent that money, … suddenly you have just 900,000 bpd to generate hard cash from export — the bulk of which (around 700,000 bpd) goes to the USA and Citgo in particular, making the USA Venezuela’s biggest customer). According to the Energy Information Agency, Venezuela’s exports to the USA netted Caracas just $4.3 billion for the first 6 months of the year … before the actual lift costs to Venezuela, which are between $10 to $23 a barrel, which is why there is not enough money to pay for food or medicine or bond payments …

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