Oil-dependent Venezuela’s crude output dipped last month below 2 million barrels per day, its lowest level in nearly three decades, global producer group OPEC said on Monday.
According to Reuters, the output fall could not come at a worse time, with the economy in crisis and the socialist government struggling to pay its foreign debt. The government opens talks on Monday with creditors to renegotiate its debt and avert a default that would plunge its economy into deeper trouble.
The Organization of the Petroleum Exporting Countries’ latest monthly data showed Venezuela reporting production of 1.955 million bpd in October, versus 2.085 million in September.
The figure was even lower based on secondary sources rather than what the government reports, at 1.863 million bpd in October, according to OPEC.
Venezuela depends on oil for more than 95 percent of hard currency export revenues, fueling both social welfare programs and payment on some $60 billion of outstanding bonds.
Houston-based Latin American oil expert Francisco Monaldi said the latest monthly drop in Venezuela’s oil production was “really extraordinary” and would likely only get worse.
“If we extrapolate to annual numbers, we’d be talking about a similar impact to what we saw during the 2002-03 strike,” he said, referring to turbulent industrial action that hit the sector during the rule of Maduro’s predecessor Hugo Chavez.
Even though OPEC does not publish historical data on output reported by members as far back as the 1980s, the last time Venezuela produced less than 2 million bpd was in 1989 according to Oil Ministry figures.
Venezuela’s annual oil output was 2.373 million bpd in 2016 and 2.654 million in 2015, according to the data it gives OPEC.
Monaldi said the sector’s key indicators - such as numbers of active rigs, exports, and crude quality - were all deteriorating at an “alarming” rate. Next year could see another 10 percent fall in production, he said in an interview.
“And all of this when the country is trying to restructure its foreign debt and faces US sanctions,” he added, referring to US President Donald Trump’s measures aimed at preventing the Maduro government from contracting new debt.