Venezuela: Oil production on steady decline

[dan_s]

From Raymond James "Stat of the Week" dated 12/27/2016:

While the OPEC/Russia production cut provided a catalyst for a potent oil market rally, several OPEC members have been in organic
decline long before the “official” cut was announced. Over the past two months, we wrote about the travails facing Libya and
Nigeria. Today we will discuss the third member of this club: Venezuela. Unlike the other two countries, Venezuela’s oil production
declines cannot be blamed on rebel violence. The backdrop is Venezuela’s political crisis, a legacy of the hardline policies that go
back to the Chavez era. PdVSA’s standing in the industry has been damaged by a history of hostility to international partners, and
exacerbated by the company’s recent cash crunch. The last straw has been an electricity crisis. In fairness, this is the result of a
drought rather than any specific policy, but regardless, the oil industry is not immune to the power shortages. Putting all this
together, Venezuelan production fell by 190,000 bpd (or 8%) in 2016, OPEC’s second-steepest decline behind Nigeria. The near-term
outlook looks equally bleak: we project declines of 220,000 bpd (or 10%) in 2017 and 140,000 bpd (or 7%) in 2018. Put simply,
Venezuela’s oil industry has become a true basket case – and the government has no one to blame but itself.