Venezuelan Oil Production Decreases as India Anticipates Rising Imports

Venezeula's Oil Industry Stumbles Once More: Another Blow in the Ongoing Saga

Caracas, February 12, 2025 - The Venezeualan oil industry has taken yet another hit, with production falling slightly after a period of steady improvement, as revealed in the latest OPEC data.

According to the report, Venezeula's February output dropped to 892,000 barrels per day (bpd), a decrease of 18,000 bpd from January's figures. Despite the setback, state oil company PDVSA reported an increase in production during the same period, with a February output of 1.03 million bpd - up from 998,000 bpd in January.

The data shows a persistent discrepancy between PDVSA's output figures and those measured by secondary sources. Disagreements over the inclusion of natural gas liquids and condensates have contributed to the incongruity.

The slight drop in production coincides with recent bottlenecks in operations due to light crude shortages. While there has been an increase in crude exports, particularly for China and US-bound shipments, the constraints have hindered growth.

Venezeula's output remains at its highest point since the US export embargo in early 2019, but the industry's expansion is faced with obstacles due to US sanctions. The Biden administration's General License 44 allowed Venezuela to sell crude freely, without levying discounts or relying on intermediaries. However, the license was not renewed in April 2024, reintroducing wide-ranging restrictions under the pretext that the Maduro government had not met agreements with the US-backed opposition.

As foreign policy hardliners lobby for harsher sanctions under Trump's administration, threats of further sanctions loom over Venezeula. Trump, who imposed a "maximum pressure" approach in a bid to trigger regime change, has suggested that the US might entirely halt oil purchases from Venezeula. Secretary of State Marco Rubio has added to the tension by raising the possibility of withdrawing Chevron's Treasury Department license to operate and sell crude from its Venezeualan joint ventures.

Chevron, with minority stakes in four joint ventures responsible for about a quarter of Venezeula's crude output, has defended its presence in the country and reportedly maintains dialogue with the Trump administration over its objectives and limitations.

India Looks to Boost Collaboration with Venezeula

Facing external pressures, the Maduro government has made attempts to forge partnerships and strengthen oil industry investments and trade.

Venezeula has long viewed India as a prime destination for crude exports, but US secondary sanctions and excessive compliance have halted agreements. However, Indian officials have expressed optimism that the flow of Venezeualan crude to India could increase, signaling potential easing of constraints.

Minister for Petroleum and Natural Gas Hardeep Singh Puri expressed confidence during the India Energy Week that "more oil would come from Venezeula." Indian public and private companies have had dealings with the Venezeualan oil sector in the past, and Puri is hopeful that past payment issues will be addressed.

Venezeula's Vice President and Oil Minister Delcy Rodriguez attended the gathering in New Delhi to showcase investment opportunities in the country's energy sector. During the events, Rodriguez expressed that those who had sought to exclude Venezeula from the international energy market were misguided. She reaffirmed the Maduro government's commitment to using Venezeuala's oil resources for the benefit of the people.

Rodriguez had previously visited India to discuss joint energy projects in October 2024. Venezeula's relationship with India seems to be strengthening, particularly after Reliance Industries, owner of the world's largest refining complex, secured US Treasury Department approval to import Venezeualan crude since the reinstatement of wide-ranging sanctions in April 2024. Other Indian companies, including state-owned Oil and Natural Gas Corporation (ONGC), have lobbied for similar permissions.

As global energy firms eye potential trade and investment opportunities in Venezeula's energy sector, American companies like Amos Global Energy Management are pursuing similar prospects. Amos, led by Ali Moshiri - a former Chevron executive, has acquired a minority stake in the PetroParia venture from China's Sinopec, giving the US firm 40% ownership of the company. The acquisition and future investments are contingent upon approval from the US Treasury.

In the face of ongoing challenges, Venezeula's energy sector is striving for growth and stability to weather the political and economic storms persisting both domestically and internationally.

Edited by José Luis Granados Ceja from Mexico City, Mexico.

Insights:- The US export embargo and sanctions on Venezeula's oil industry have contributed to instability in the sector, hindering production, exports, and partnerships with foreign companies.- The evolving foreign policy stance of the US and increasing pressure from hardline factions could intensify the challenges facing Venezeula's oil industry.- India is looking to expand its partnerships and crude imports from Venezeula, which could lead to increased cooperation between the two nations.- Companies like AMOS Global Energy Management are seeking opportunities in Venezeula's energy sector, despite the lingering uncertainty surrounding US sanctions.- Participation from foreign companies like Reliance Industries, ONGC, Repsol, and Eni in Venezeula's energy sector is essential for the industry's growth but is fraught with risks due to the US's evolving foreign policy stance.

Despite the ongoing discrepancies in the reporting of exportable crude oil, such as condensates, from Venezuela, the Indian government expresses optimism for increasing crude imports from Venezuela, signaling potential easing of constraints.
As Venezuela looks to boost collaboration in its oil industry, American firm Amos Global Energy Management, led by Ali Moshiri, a former Chevron executive, pursues opportunities in Venezuela's energy sector, aiming to acquire a significant stake in the PetroParia venture.
In the midst of American firms' interest and ongoing challenges, Venezuela's Vice President and Oil Minister Delcy Rodriguez attends events in India to showcase investment opportunities in Venezuela's energy sector, promoting the country's sports industry as a potential area of collaboration alongside oil trade and investment.