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At the 101 st meeting of the OPEC Conference in November 1996, it was decided that, from then on, the output of crude oil of the member countries for the purpose of assessing compliance with their respective quotas would be determined on the basis of production estimates published by six secondary sources, to wit: Cambridge Energy Research Associates (CERA), the Centre for Global Energy Studies (CGES), the Energy Information Agency of the US Department of Energy (EIA), the International Energy Agency (IEA), Petroleum Intelligence Weekly (PIW) and Platts. This roundabout mechanism was meant to address the situation whereby certain member countries were producing oil in excess of their assigned quota, and then communicating to the OPEC Secretariat output figures which did not reflect this violation of quota.

This mechanism is very revealing of the disarray in which OPEC found itself in the late 1990s. As an acute oil market observer lapidarily observed to the author, since 1986 OPEC has just had the one meaningful policy lever to pursue its objectives (the quota system), and this mechanism was tantamount to abandoning this lever in the hands of organizations whose opinion about the whole OPEC set-up ranged from the uncompromisingly and institutionally hostile (EIA, IEA), to the almost-but-not-quite neutral (Platts), by way of the dismissive bordering on the contemptuous (CERA, CGES and PIW).

At the time when this mechanism was introduced, the OPEC member country exceeding its production quota in the most blatant and brazen fashion was Venezuela. After November 1996, Venezuela did not betray any inclination to curb its oil output to collaborate with other member countries in stabilizing oil prices. The only discernible change in the prevailing market situation was that it was left to the secondary sources (rather than the OPEC Secretariat) to highlight the gaping gulf between Venezuela´s output, on the one hand, and its quota commitments, on the other. And this the secondary sources did with mounting glee.

Given the thrust of Venezuelan output policy at the time, it is somewhat surprising to see that it was precisely representatives of this country, which came up with the idea of using output estimates culled from secondary sources as an alternative form of production monitoring. Furthermore, Venezuela was also instrumental in the nomination and selection of the six secondary sources mentioned above. These facts beg an obvious question: why would Venezuela espouse this oversight mechanism in the first place, when it was this country´s behavior that was contributing in a major way to market instability, not least by hamstringing OPEC´s ability to restrict supplies? The answer to this question is counterintuitive: the idea that quota compliance be assessed on the basis of estimates from secondary sources was an important plank in a long-term strategy devised by the top management of the Venezuelan national oil company (in cahoots with some major international oil companies and supra-national institutions), to make the country withdraw from OPEC, albeit de facto rather than de jure .

It is difficult to make sense of this assertion, sine ira et studio , unless one makes a brief reference to two factors that were largely responsible for shaping the political interaction between Venezuela and other OPEC member countries during much of the 1990s. The first one was that the terminal decay of the Venezuelan political system had allowed Petróleos de Venezuela (PDVSA) to dismantle the institutional framework of the country´s oil industry and to take charge of all aspects of oil policy, including the handling of its relationships with OPEC (a body which PDVSA always saw as an Arab-led cabal whose main goal was to deprive Venezuela of its rightful place in the oil firmament). The second one was the knowledge that extra-heavy crude oils from the Orinoco Oil Belt would, in the not too distant future, account for the bulk of Venezuelan oil output. In this regard, it is worth recalling that, by late 1996, extra-heavy crude production for blending into commercial segregations such as Merey or Leona was already running at around 300,000 b/d, and a further 60,000 b/d or so was being transformed into Orimulsion, a boiler fuel for oil–fired power stations (sold at a delivered price on a par with that of steam coal). Even more importantly, the Venezuelan Congress had either approved, or was in the process of approving, four upgrading joint ventures with international oil companies (with a joint expected output of more than 650,000 b/d by 2005), as well as two more ventures to produce around 200,000 b/d of crude to transform into Orimulsion. And to cap all of this off, the short and medium term prospects for additional upgrading (and even Orimulsion) ventures appeared to be very promising.

PDVSA´s leadership accepted that, even though their policy of producing oil à outrance might very well succeed in rending OPEC asunder, the outright and formal withdrawal of Venezuela from OPEC was not a proposition that they would be able to force on the country´s political leadership, despite the latter´s chronic weakness. But there was a way in which they could make Venezuela leave OPEC piecemeal, albeit with less noise and political fallout and, hence, greater probabilities of success. For this to happen, however, oil from the Orinoco Oil Belt would have to be excluded from the Venezuelan quota by some means. Thus, as production of such oil rose in time, a progressively smaller – and ultimately irrelevant – proportion of Venezuela´s output would be involved in the OPEC quota system.

The foundations for this subterfuge had been carefully laid down a few years before, with the commercial launch of Orimulsion. Venezuela (or rather, PDVSA) claimed that this fuel was prepared by emulsifying Orinoco natural bitumen in water. This claim was never more than a fabrication, though. The Standards Committee of the World Petroleum Congress unambiguously defines natural bitumen as a hydrocarbon with a dynamic viscosity of 10,000 millipascal/second or greater, measured at reservoir temperature and atmospheric pressure, on a gas free basis. Orimulsion was prepared with extra-heavy crudes with a dynamic viscosity barely exceeding 3,000 mPa/s at reservoir temperature (indeed, that this crude did not satisfy the definition of natural bitumen was the reason why it could be produced from conventional flowing wells). However, under standard temperature and pressure conditions – 15.56°C, 760 mmHg – the Orinoco crudes in Orimulsion (which are essentially identical with the ones contained in blends like Merey or – even more pertinently for the case at hand – the ones processed nowadays in the four upgraders located in Jose, Anzoátegui state) are just as viscous as the genuine natural bitumens from the Alberta oil sands. Furthermore, Venezuelan extra-heavy crudes and Canadian natural bitumens are remarkably similar in terms of their respective densities, sulfur content and general chemical compositions, which helped give credence to PDVSA´s assertion that the former were also natural bitumens. Moreover, since natural bitumens are universally considered to be non-conventional hydrocarbons, PDVSA argued by analogy that this name should be applied to the Orinoco extra-heavy crudes as well, particularly since the latter did not satisfy the definition of crude oil informally used by OPEC since 1983 (the OPEC Conference has never formally adopted a definition of crude oil, only of condensate, but from that year onwards, its Statistical Annual has incorporated a formulation taken over from the American Petroleum Institute, whereby crude oil is said to be a liquid not only underground but above ground as well, at standard conditions).

The Orimulsion boondoggle served to establish an all-important precedent in terms of the long-term anti-OPEC objectives of the PDVSA leadership, namely that production of non-conventional oil is not subject to quota. OPEC´s acquiescence towards Orimulsion at the time of the latter´s gestation doubtless owed as much to the marginal volumes initially involved as to the organization's aversion to unpleasant political discussions. Unfortunately, OPEC´s “decision through non-decision” allowed PDVSA to drive a thin wedge through the heart of the quota system. The idea was that this breach would be relentlessly widened as the upgrading projects came on stream. However, since volumes from these large projects would have a non-negligible impact on the oil price, PDVSA naturally did not want to leave it up to OPEC to decide whether or not they should be covered by the quota system. It would be much preferable if someone could be relied upon to report Venezuela´s oil output “correctly” to OPEC (ie the production of ‘conventional oil' subject to quota), and this is precisely where the secondary sources came in. It is no accident that the secondary sources that OPEC chose in 1996 (at the instigation of Venezuela), all hold as a matter of dogma that ‘non-conventional' is fully synonymous to ‘not subject to quota', even though the OPEC Conference has never issued any pronouncement whatsoever in this sense.

One would think that the coming to power of President Hugo Chávez spelled the end of PDVSA´s plan to undermine OPEC from within. After all, shortly after taking office, Mr Chávez effectively reined back Venezuelan production, and he lost little time in dismissing the head of PDVSA. Furthermore, the capability of the ‘old school' managers to mount an anti-OPEC counterattack was dealt a fatal blow after most of them left the company in the wake of their failure – on two separate occasions! – to unseat the Chávez government in the year 2002. Nevertheless, the stratagem of using the secondary sources to subvert the quota system survived the demise as a political force of its Venezuelan promoters. This survival owed as much to the chronically volatile political environment in Venezuela, as to the fact that quite a few influential officials of the Chávez administration were (and, indeed, many continue to be) enthusiastic supporters of the Orimulsion business and, by extension, of its anti-OPEC thrust.

Back in 2001, when speaking of the progress of the upgrading ventures in Venezuela (and very much with an eye on the Orimulsion-set precedents), the IEA reminded the market at large that “there [was] some uncertainty as to whether Venezuela´s extra-heavy oil will be counted as ‘crude', subject to OPEC´s quotas, or treated as ‘bitumen', outside of OPEC´s current regime” ( Oil Market Report , 11 May 2001, page 16). However, once the production of upgraded oil in the Orinoco took off in earnest, in July 2002 the IEA proceeded to switch “from a classification that reported Venezuelan heavy oil production as crude oil, to one whereby Venezuelan synthetic crude production was counted in the OPEC NGL and non-conventional oil category,” with this switch supposedly being consistent with “a number of statements suggesting that heavy oil and/or synthetic crude production was not included for consideration towards Venezuela´s OPEC production quota” ( OMR , 14 March 2006, page 18). As a result of this move, while maintaining overall supply constant, the IEA at a stroke lowered its production estimates for Venezuela by some 300,000 b/d (and revised its series back to 2001 – OMR , 12 July 2002, page 22), and Venezuela´s official production figures started to come in lower than the IEA estimates (the reverse had been true until then). From that point on, the gap between the Venezuelan and the IEA figures has continued to widen, as shown in Graph 1. Tellingly, there has always been a very close correspondence between the monthly variations in this gap, on the one hand, and the monthly output of extra-heavy crude from the Orinoco Oil Belt, on the other hand. Incidentally, the other five secondary sources followed the IEA´s lead in excluding these crudes from their own estimates.

The IEA´s adoption of these accounting changes preceded by only a short interval the strike which paralyzed the Venezuelan oil industry between November 2002 and March 2003, and which wrought untold damage on many of its oil fields, especially those around Lake Maracaibo. During the recovery period after the strike, for obvious reasons, Venezuela was not in a position to fulfill its OPEC quota. Come May 2003, however, Venezuelan total crude production had more or less recovered to pre-strike levels, thanks in no small part to a very significant increase in the production of Orinoco extra-heavy oil that compensated for the accelerated decline in output from other areas (in other words, after the strike, Orinoco extra-heavy production was responsible for a much higher share of Venezuelan production than before the strike: currently, it accounts for more than a quarter of crude oil output). However, the secondary sources persisted in reporting that Venezuela was producing way below quota, claiming that the country´s oil industry had not recovered from the sabotage (a situation for which they readily blamed the Chávez government). Nary a mention was made of their accounting changes or their effect, however, beyond notes in footnotes explaining that upgraded crude oil output was not considered towards Venezuela´s “crude target compliance calculation.” And no heed was paid to Venezuelan complaints pointing out that Orinoco extra-heavy crude was being excluded for no good reason from these calculations. If the IEA ever felt the need to respond to such complaints, it tended to justify its methodology with statements such as the following: “to date, Venezuela has excluded Orinoco resources from estimates of its conventional oil reserves [note: reserve s , not OPEC production]. Now the government is lobbying for these to be included [but included what where? Orinoco resources in reserves figures? Orinoco production in quota estimates? And who, exactly, would the government have been allegedly lobbying?]… This Report classifies syncrude production as non-conventional and thus excludes it from monthly estimates of Venezuelan crude oil supply ( OMR , 10 November 2004, page18).” By the by, since synthetic/upgraded crude is, strictly speaking, a refined product, its exclusion from these statistics is understandable, indeed justifiable. Alas, the same cannot be said for the exclusion from the statistics of the extra-heavy crude from which such synthetic/upgraded crude is derived.

Given this sort of response, it is hardly surprising that the Venezuelan oil minister decided to visit the IEA personally to inform its Director that the Venezuelan government did consider Orinoco crudes as part of the country´s quota. His representations led to the IEA increasing its estimates of Venezuelan production in March 2006, but only temporarily. After a couple of months, the figures reported by the IEA and other secondary sources had returned to their previous levels, resuming a downward trend which they maintain to this day, and with an even more pronounced slope than before. To muddle the situation further, the IEA and other sources thereafter maintained that the picture of accelerating production decline that they painted included output from the Orinoco Belt.

The gap between IEA and Venezuelan figures currently stands at around 750,000 b/d, a figure that is so large that one can dismiss out of hand the hypothesis that the source of the divergence is a statistical error. Indeed, the Venezuelan Ministry of Energy and Petroleum is in a position to demonstrate that the estimates published by the secondary sources are absurd. After all, Venezuelan domestic consumption is a fairly well known quantity, and the totality of Venezuelan petroleum exports has to leave the country through only eight marine terminals and a floating storage and offloading vessel (FSO) in the Corocoro offshore field. Thus, to get a reasonable proxy for Venezuelan crude production, one need only tally Venezuelan seaborne exports – a task that surely is within the reach of the secondary sources – and add the resulting figure to the domestic consumption estimate.

Acting upon the assumption that the credibility of the results would be enhanced if the exercise were carried out by an independent party, the ministry retained Inspectorate (www.inspectorate.com), a British firm of long standing that is one of the world's leading inspection and testing companies, in order to quantify the monthly gross and net volumes of oil being exported from Venezuela (exports should be understood in the strictly territorial sense of oil leaving Venezuelan jurisdiction, whether for storage abroad or through an actual sale). The tallying would be done on the basis of the bill of lading or discharge certificate issued for each and every cargo, provided to Inspectorate by the Servicio Autónomo de Metrología de Hidrocarburos (SAMH – Autonomous Service for the Measurement of Hydrocarbons), a new agency set up to make Venezuelan measurement practices fit for purpose once again, after decades of neglect by former PDVSA management. Thus far, reports have been prepared for the months of November and December 2008 and January, February and March 2009, and the exercise will continue for the foreseeable future. The tables summarizing the monthly results can be found at the end of this article.

As can be appreciated in these tables, the net monthly Venezuelan oil exports (which include some volumes of LPG and natural gasoline obtained from condensates and natural gas liquids, respectively) exceed, by a very handsome margin, the total Venezuelan crude production put out by the secondary sources for these months. These figures suggest that, either the production estimates of the secondary sources are inaccurate, or else that the Venezuelan government is inflating its production figures. The latter alternative is not impossible per se , of course. Moreover, it fits well with the unfavorable image that most trade journals (as well as other media) try to project about the Chávez government, which is said to be bent upon a “politically motivated” mission “to polish the tarnished image of the national oil industry ... and restore Venezuela´s standing in OPEC” ( Energy Compass , 13 March 2009). However, this theory would require that Venezuelan domestic consumption be minutely small and, in addition, that Venezuela draw down, month by month, from a large inventory of oil (which is yet to show sign of becoming exhausted) held in some mystery location and, last but not least, that the inspection company be inept. Which reflection brings us to an obvious question: what is the source of the information that the IEA and other secondary sources are using in order to arrive at their production estimates?

The answer to this question is quite straightforward. Up until the 2002-03 strike, PDVSA maintained informal but very strong bonds with certain secondary sources. After the strike, the latter maintained their strong links with the PDVSA faction that unsuccessfully tried to topple the Chávez government. And given that the strike severed the flow of detailed information that PDVSA used to make available to them, these secondary sources resorted to sourcing unofficial information from “tertiary sources” consisting of individuals belonging to the defeated PDVSA faction. And the information on output that these tertiary sources make available simply does not include Orinoco crude volumes, partly as a matter of ideological principle (these individuals were the very ones who set the whole thing up in order that such crudes be excluded from the quota, after all) and, increasingly, on grounds of political expediency. This latter angle is easy to grasp. These individuals use the data published by the IEA and other secondary sources (and, paradoxically, legitimized by OPEC itself, through its use of the secondary sources in quota monitoring) as ‘proof' that the Chávez administration has been responsible for a calamitous collapse in Venezuelan oil output.

The IEA and other secondary sources maintain that they prepare their production estimates with due care and, above all, in good faith. However, the secondary sources surely are sophisticated enough organizations for the rule of caveat emptor to apply in their dealings with their sources of information. Finally, and most tellingly, the information presented in this article shows that it would now be relatively easy for the IEA and other secondary sources to ascertain the true situation regarding Venezuelan output.

According to Energy Compass (sister publication of PIW , one of the six OPEC secondary sources), “the world has a problem with Venezuela´s oil data. Caracas wants everybody to believe that it produces more than 3mn b/d, while the most generous independent estimate puts the volume at least 400,000 b/d lower. Venezuela ... is now on a mission to convince the key data compilers that its production woes are not as severe as outside sources believe” ( Energy Compass , 13 March 2009). Actually, if the world has a problem with a set of data, it is that of the secondary sources. It is not Caracas that wants everybody to believe that it is producing 3mn b/d; rather it is the secondary sources that want everybody to believe that Venezuela is doing otherwise. And Venezuela is certainly not on a mission to convince anybody, least of all the secondary sources.

It should be noted that perhaps one reason why many people are still reluctant to jettison the estimates of the secondary sources is the effect that this would have on their demand/supply models. But even if one is not among those who would rather prove the reality of their models than use models to understand reality, should not one be concerned at the sort of stockbuild that all this unreported oil would imply, and its likely price consequences? The answer is negative. Global stock level statistics are invested by the market at large with a degree of precision that they do not have (not least because they are residual magnitudes where error terms tend to accumulate). The inherent inaccuracy of global stock data would make it quite easy for the currently unreported Venezuelan barrels to be lost among all the statistical noise. In this regard, it is worthwhile to point out that the spread between the highest and the lowest estimated stockbuild figures for 2009 in the major market tracking publications is currently running at the equivalent of 1mn b/d. A far more pertinent question for the market, as well as energy policymakers everywhere, would appear to be the following: what would the price of oil had been in September 2008 had Venezuela really been producing what the IEA and other secondary sources claimed it was producing?

Monthly Venezuelan Exports Of Crude Oil,
Upgraded Oil And Petroleum Products (Barrels)

	Exports						Imports
	Load	Crude		Total	No of	No of		Total	No of	Net
Month	Port	Oil	Products	Volume	Vessels	BOLs	Products	Volume	Vessels	Exports
Nov 2008	FSO Nabarima	851,096	0	851,096	1	1	0	0	0	851,096
La Salina	2,294,599	0	2,294,599	7	7	0	0	0	2,294,599
Bajo Grande	2,451,208	0	2,451,208	7	7	0	0	0	2,451,208
El Palito	0	1,392,712	1,392,712	5	5	1,423,859	1,423,859	7	-31,147
Pto Miranda	4,249,661	0	4,249,661	13	17	0	0	0	4,249,661
Cardón	0	3,713,116	3,713,116	14	18	648,794	648,794	6	3,064,322
Amuay	0	4,453,065	4,453,065	16	19	389,635	389,635	2	4,063,430
Guaraguao	16,358,231	1,956,120	18,314,351	47	75	434,426	434,426	5	17,879,925
Jose	23,461,516	13,895,757	37,357,273	63	71	0	0	0	37,357,273

Total (Barrels)		49,666,311	25,410,770	75,077,081	173	220	2,896,714	2,896,714	20	72,180,367

	Exports						Imports
	Load	Crude		Total	No of	No of		Total	No of	Net
Month	Port	Oil	Products	Volume	Vessels	BOLs	Products	Volume	Vessels	Exports
Dec 2008	FSO Nabarima	778,267	0	778,267	1	1	0	0	0	778,267
La Salina	2,676,005	0	2,676,005	8	8	0	0	0	2,676,005
Bajo Grande	198,762	0	198,762	1	1	0	0	0	198,762
El Palito	0	1,579,718	1,579,718	4	5	1,830,991	1,830,991	11	-251,273
Pto Miranda	4,871,225	0	4,871,225	14	15	0	0	0	4,871,225
Cardón	0	2,973,607	2,973,607	12	22	540,457	540,457	5	2,433,150
Amuay	0	6,877,729	6,877,729	21	23	374,168	374,168	3	6,503,561
Guaraguao	18,323,226	1,495,417	19,818,642	49	73	583,154	583,154	5	19,235,488
Jose	25,193,161	12,219,022	37,412,183	62	74	0	0	0	37,412,183

Total (Barrels)		52,040,646	25,145,492	77,186,138	172	222	3,328,770	3,328,770	24	73,857,368

	Exports						Imports
	Load	Crude		Total	No of	No of		Total	No of	Net
Month	Port	Oil	Products	Volume	Vessels	BOLs	Products	Volume	Vessels	Exports
Jan 2009	FSO Nabarima	788,658	0	788,658	1	1	0	0	0	788,658
La Salina	3.089,287	0	3,089,287	9	9	0	0	0	3,089,287
Bajo Grande	598,810	0	598,810	2	2	0	0	0	598,810
El Palito	0	2,059,556	2,059,556	7	7	478,267	478,267	2	1,581,289
Pto Miranda	4,472,120	0	4,472,120	13	14	0	0	0	4,472,120
Cardón	0	3,714,338	3,714,338	17	29	154,321	154,321	3	3,560,017
Amuay	0	10,026,500	10,026,500	31	37	451,382	451,382	4	9,575,118
Guaraguao	15,740,093	2,569,562	18,309,655	47	66	191,403	191,403	2	18,118,252
Jose	26,021,544	15,379,645	41,401,189	71	80	0	0	0	41,401,189

Total (Barrels)		50,710,512	33,749,601	84,460,113	198	245	1,275,373	1,275,373	11	83,184,740

	Exports						Imports
	Load	Crude		Total	No of	No of		Total	No of	Net
Month	Port	Oil	Products	Volume	Vessels	BOLs	Products	Volume	Vessels	Exports
Feb 2009	FSO Nabarima	1,576,828	0	1,576,828	2	2	0	0	0	1,576,828
La Salina	2,770,709	0	2,770,709	9	9	0	0	0	2,770,709
Bajo Grande	1,910,225	0	1,910,225	7	7	0	0	0	1,910,225
El Palito	0	984,835	984,835	3	3	888,828	888,828	5	96,007
Pto Miranda	4,542,029	0	4,542,029	14	15	0	0	0	4,542,029
Cardón	0	2,840,328	2,840,328	13	19	362,392	362,392	5	2,477,936
Amuay	0	6,065,981	6,065,981	23	25	259,373	259,373	2	5,806,608
Guaraguao	14,435,012	3,262,122	17,697,134	43	61	330,110	330,110	6	17,367,025
Jose	20,007,793	14,296,568	34,304,361	58	68	0	0	0	34,304,361

Total (Barrels)		45,242,596	27.449.835	72,692,431	172	209	1,840,702	1,840,702	18	70,851,728

	Exports						Imports
	Load	Crude		Total	No of	No of		Total	No of	Net
Month	Port	Oil	Products	Volume	Vessels	BOLs	Products	Volume	Vessels	Exports
Mar 2009	FSO Nabarima	788,056	0	788,056	1	1	0	0	0	788,056
La Salina	3,104,854	0	3,104,854	9	9	0	0	0	3,104,854
Bajo Grande	1,209,106	0	1,209,106	4	4	0	0	0	1,209,106
El Palito	0	1,425,741	1,425,741	5	5	1,050,316	1,050,316	5	375,425
Pto Miranda	5,128,931	0	5,128,931	15	17	0	0	0	5,128,931
Cardón	0	3,222,958	3,222,958	12	18	339,709	339,709	4	2,883,249
Amuay	0	7,668,369	7,668,369	21	21	239,202	239,202	2	7,429,167
Guaraguao	14,751,317	2,100,782	16,852,099	42	66	477,821	477,821	5	16,374,278
Jose	21,441,011	15,246,008	36,687,019	65	70	0	0	0	36,687,019

Total (Barrels)		46,423,275	29,663,858	76,087,133	174	211	2,107,048	2,107,048	16	73,980,085

Upgraded crude oil is only exported from Jose, and all Jose product exports are upgraded crude oil.

Products exports include small volumes of LPG refined from condensates as well as natural gasoline from separation plants, but do not include natural gas liquids exports by PDVSA Gas. Exports of such liquids for the months of November and December 2008, and January, February and March 2009 are 60,023 barrels, 131,799 barrels, 460,070 barrels, 601,107 barrels and 294,316 barrels , respectively.

The reports from which the above tables have been drawn were prepared by Inspectorate representatives, who attended the offices of the Ministry in Caracas, Venezuela, where they were provided by SAMH with copies of bills of lading for the relevant months, grouped by port of departure, as well as the copies of certificates of discharge for imported products for those same months. The bills of lading for petroleum exports and certificates of discharge for imported products provided to Inspectorate representatives, and reviewed by them, complied with the official form for such documents in terms of their size, wording, arrangement and style, and all were duly signed and sealed by the Master of Agents of the vessels involved in the export (and import) of petroleum from (to) Venezuela. Furthermore, Inspectorate provided independent inspection services for a number of the export and/or import operations during the relevant months, and the cargo quantities related to these operations, as stated in the bills of lading/certificates of discharge provided to Inspectorate representatives for their review corresponded to the quantities that Inspectorate witnessed when it provided independent inspection services for such operations. Finally, Inspectorate representatives tallied all the bills of lading to determine the total volume of petroleum exported and imported, and the net volume exported, as well as the total exports of crude oil, upgraded oil and petroleum products on a port-by-port basis. The results stated in Inspectorate's reports are accurately expressed, and neither the Inspectorate representatives nor Inspectorate have received and will not receive direct or indirect compensation in exchange for expressing specific figures in their reports. The reports were prepared on the basis of information that Inspectorate believed is reliable and comprehensive, but Inspectorate makes no representation that such information is accurate or complete. Inspectorate's role in connection with the preparation of these reports has been limited to the certification of Inspectorate's own calculation of volumes based upon documents provided to Inspectorate, and which Inspectorate has taken in good faith.

Neither the contents of these reports nor Inspectorate's role in reviewing the documents that underlie them, should be construed as constituting any representation or other assurance, express or implied, on the part of Inspectorate as to whether such documents were genuine, authentic and/or legally valid.

Inspectorate is not certifying or vouching for the accuracy or authenticity of the documents provided to it or the volumes of oil, petroleum products or liquid petroleum gases actually exported or imported to/from Venezuela during the months in question.

Juan Carlos Boué is Senior Advisor to Venezuela's Ministry of Energy and Petroleum.
Petroleumworld not necessarily share these views.

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