There are more problems on the horizon for the oil industry and its coming of all places from Venezuela.
One of Venezuela’s major problems has been that Mr Chávez’s has been pillaging the state oil firm PDVSA. It is now run loyal supporters of the regime, starved of investment and income used for social spending of the Government, cutting its output from 3.3m barrels per day (b/d) in 1998 to around 2.25m b/d today, according to industry estimates. Of that, some 1m b/d is sold at subsidized prices at home or to regional allies, like Cuba, Suriname and others, leaving just 1.25m b/d for full-price exports.
If this keeps going on Venezuela will not be able to pay his countries debts and causing the bond markets to fear for the solvency of the world’s eighth-largest oil producer.
EU-Digest
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