Oil wells are going dark across Venezuela’s Orinoco Belt as storage tanks overflow and export tankers stay away, with production in the country’s main oil region plunging 23% to 398,000 barrels per day by mid-January, according to internal PDVSA data seen by Bloomberg.
The state oil company has shut wells since late December amid overflowing storage caused by a US naval blockade that has intercepted sanctioned tankers. PDVSA now uses vessels as floating storage, with stored volumes reaching 23.6 million barrels by mid-December, up from 12.5 million barrels in early December.
The Orinoco Belt accounts for nearly two-thirds of Venezuela’s total production and produces extra-heavy crude requiring specialized processing. Production breakdown on January 14 shows PDVSA direct operations at 81,000 barrels per day and joint ventures at 317,000 barrels per day, with the Carabobo division at 199,000 barrels per day, Ayacucho at 146,000 barrels per day, Junin at 52,000 barrels per day, and Boyaca at 35 barrels per day.
Wells producing extra-heavy crude require constant heat and pressure to maintain flow, making restarts technically complex after prolonged shutdowns. Industry analysts warn that wells left idle for extended periods suffer formation damage requiring extensive rework to restore production.
The blockade aims to cut off oil revenue that accounts for more than 95% of Venezuela’s export earnings. Venezuela’s total production has fallen from approximately 1.1 million barrels per day before the blockade to an estimated 800,000 to 900,000 barrels per day currently. Chevron continues exporting under a US license, averaging approximately 150,000 barrels per day.
China, which received 80-85% of Venezuelan oil exports before December, has seen shipments fall to near zero. The country imported roughly 500,000 to 700,000 barrels per day of Venezuelan crude before the blockade.
Related: Trump Threatens to Exclude Exxon After CEO Calls Venezuela ‘Uninvestable’
The Trump administration failed in its attempt to seek $100 billion in private investment to rebuild Venezuela’s oil infrastructure. Major oil companies have called the country “uninvestable” without legal reforms.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
