Venezuela's hampered energy sector limits US oil ambitions

MEXICO CITY

Washington’s agreement with Venezuela’s state-owned oil company PDVSA that was announced Wednesday entails up to 50 million barrels of oil in exports, while crude capacity in the South American country is less than 1 million barrels, according to the Organization of Petroleum Exporting Countries.

President Donald Trump’s hostile takeover of the Venezuelan energy sector following the US capture of President Nicolas Maduro resulted in a deal with PDVSA, with Trump boasting that Venezuela will send 30 to 50 million barrels to America.

Venezuela has the largest oil deposits in the world, nearly 20% of global reserves, surpassing Iran, the US, Saudi Arabia and Canada.

But years of US sanctions and underfunding have dilapidated oil production in Venezuela.

Venezuela produces between 900,000 and a little more than 1 million barrels a day, according to the Organization of Petroleum Exporting Countries (OPEC), with the latest report documenting oil production stagnating at 934,000 a day by November, which would mean Venezuela would need 30 to 50 days to produce the amount cited by Trump.

The installed capacity in Venezuela’s energy sector fails to comply with the scale of US oil consumption, which exceeds the 20-million-barrel mark on a daily basis, according to the US Energy Information Administration.

The Trump administration is rolling back some sanctions to enable the marketing of Venezuelan crude, according to the US Energy Department, which said the Trump administration will also begin to import select oil field equipment, parts and services through joint investments between the US and international energy partners.

The White House said Trump would hold a meeting Friday with oil executives to discuss their possible involvement in Venezuela's oil sector.