Introduction
There is a large discrepancy between Venezuela’s official production figures and the substantially lower production data reported by international agencies. In addition, domestic petroleum consumption has likely been much higher than officially reported. The debate around the production, domestic consumption and export figures is important for at least four reasons.
• First, these figures constitute the basis for the assessment of the performance of Petróleos de Venezuela (PDVSA), particularly on how the company has evolved since late 2002-early 2003 strike that brought operations to a halt and in which the government fired half the industry’s labor force.
• Second, since crude oil production may be lower and domestic petroleum consumption much higher, petroleum export volumes could be considerably lower than reported, with implications for both oil export revenue and determining which markets are effectively supplied and by how much.
• Third, oil export revenue figures are calculated on the basis of the official export volume figures; thus, official oil export revenue estimates may be grossly overestimated. If so, the actual amount of funds available to the government could be just a small percentage of the official reported revenues. Stated differently, the Venezuelan economy may be in far worse shape than officially announced, and in a weaker position to face the present sharp fall in oil export revenue.
• Fourth, Venezuela’s exports to markets other than the United States, the Caribbean and Central America are lower than Venezuela’s official figures state. In addition, the latest oil provided by Venezuela under government-to-government agreements was sold at a discount, with payments financed over a 25-year period. As a result, Venezuela has become ever more dependent on its exports to the United States as a source of export cash revenue. The bottom line is that official figures for the last decade may overstate export volumes by as much as 55%. PDVSA exports, excluding the strategic associations1, may be overestimated by as much as 75%.
To get a sense of these issues, the essay that follows is divided into three parts, which discuss production, domestic consumption, and exports of crude oil and petroleum products. The first section compares crude oil production official figures with those reported by the International Energy Agency (IEA). From this data, two quite different readings of the sector can be made since 2003.
Secondly, domestic consumption of oil products is analyzed, contrasting alternative estimates for the period 2004-08 with the official figures. Thirdly, official export data are contrasted with estimated exports. The estimated figures are calculated from the IEA production data and the estimated domestic consumption data. Finally, calculated exportable surplus is contrasted with official U.S. imports from Venezuela, and, as a residual, exports to markets other than the United States are estimated.
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Ramón Espinasa, Consultant, Energy Division Infrastructure and Environment Sector Inter-American Development Bank (IDB) Washington, D.C.. Petroleumworld not necessarily share these views.
Editor's
note: This paper expands upon remarks delivered at the third session of the Energy Cooperation and Security in the Hemisphere Task Force, February 26, 2009. Petroleumworld reprint this article in the interest of our readers.
