Is Doomsday Inevitable For Venezuela?o

AT THIS POINT, PROBABLY: Is Doomsday Inevitable For Venezuela?

The problems could grow worse. Several oil service companies suspended or slowed operations in Venezuela this year due to difficulties in obtaining payment from the state-run oil company, Petróleos de Venezuela (PDVSA). Contractors have cut back on drilling in Venezuela amid rising unpaid debt, which threatens to take Venezuela’s output down even further.
On June 28th 2016, Baker Hughes reported that the number of oil rigs in Venezuela dropped from 69 to 59 in May of this year. The CEO of the Italian oil and gas contractor Saipem SpA said that in April the company had suspended 89 percent of its operation rigs in Venezuela (25 of its 28 rigs). Other companies as Schlumberger or Halliburton Co are reducing their activities in Venezuela because of unpaid services bills. Venezuela’s active rig count, a good indication of future production, fell from 71 to 49 in July according to Baker Hughes, the lowest since the end of 2011.

That’s some bad luck, eh?
The author adds, “Even if oil prices increase, the situation is very complicated for Venezuela’s economy.” Those “complications” can be reduced to just three words: Chavez, Maduro, and socialism — but you won’t find those words anywhere in this report.

19Posted at 12:30 pm by Stephen Green