Venezuela's Oil Tale

By Grisanti, Alejandro | Americas Quarterly, Spring 2011 | Go to article overview

Venezuela's Oil Tale


Grisanti, Alejandro, Americas Quarterly


Globally, oil prices are again on the rise, but President Chávez' oil and economic policies mean that they will likely bring few long-term economic benefits to Venezuelans.

THE UNCERTAINTIES SURROUNDing Venezuela and President Hugo Chávez make it very difficult to discern the truth about what is going on in the country. For example, how does one explain the underperformance of Venezuela's bonds in the past four years, in the middle of an unprecedented increase in oil prices? Or the market's deteriorating confi- dence in Venezuela despite the fact that is has improved its liquidity and capacity to pay?

Venezuela's oil and energy policies, which are at the heart of national politics as well as the national economy, are often misinterpreted. But it is important for analysts to focus on several key aspects of the country's economic policymaking, including the current and projected levels of oil production, the cost of Venezuelan petro-diplomacy in Central America and the Caribbean, and the opportunity cost of the domestic gasoline price. An analysis of Venezuela's energy and economic policies reveals some surprising conclusions, but one thing is certain: do not expect any changes before the presidential election in December 2012.

HOW MUCH DOES PDVSA EXPORT?

A variety of methods can be used to calculate Venezuela's oil exports. Oil export figures reported by the Central Bank of Venezuela (BCV) and the state-owned petroleum company, Petróleos de Venezuela, S.A. (PDVSA) claim total oil production of 3.1 million barrels per day (mbd) in the first half of 2010, with exports of 2.4 mbd- down from 2.8 mbd in exports from the same period in 2009. At this level, oil exports generated approximately $61 billion last year.

But figures from the Organization of the Petroleum Exporting Countries (OPEC) contradict Venezuela's. OPEC calculations claim an average oil production of only 2.3 mbd for 2010, which implies gross exports of 1.6 mbd. PDVSA has constantly said that the source of this difference is that the OPEC figures do not fully account for production in the Orinoco Belt-a territory with large deposits of extra heavy crude oil-along with condensates and other products.

Given the nearly 1 mbd difference in the Venezuelan versus OPEC figures, PDVSA hired British firm Inspectorate to verify its level of oil exports. Since 2009, Inspectorate has certified net oil exports, defining them at 2.3 mbd on average during 2010-a number close to the official figures.

Another method for determining true oil exports is to compare Venezuela's export numbers with Venezuelan oil import data reported from other countries. In carrying out this analysis with data for 43 countries from the United Nations commodity trade statistics database, no major deviation from the official gross export data published by PDVSA could be found for the 2005-2009 period.

But the same could not be said for net exports. The difference among net and gross exports could be important, since PDVSA said that it bought $24.3 billion in oil and derived products (around 1.2 mbd) in the first nine months of 2010. Basically, some of the oil processed in the refineries owned or partially owned by PDVSA could have been bought from other producers. The problem is that no other oil-producing country claims to be selling oil to Venezuela. This likely means that most of these transactions are among different refineries that PDVSA owns, or in which it has a form of participation.

From these figures, it is not possible to make a final conclusion on net oil exports. The sample does not include all countries, and PDVSA could still have some margin to distort the figures by buying oil in international markets. But these calculations indicate that actual oil exports will be closer to the official figures than those published by OPEC and other independent analysts. This implies that Venezuela does not have a problem of cash constraints. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Venezuela's Oil Tale
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.