Venezuela: From Bad To Worse

VENEZUELA

From Bad to Worse

Venezuela’s oil output plunged to a 28-year low in 2017, and that’s the good news.

Though Opec reported Venezuela’s crude oil production fell nearly 13 percent year-on-year in December, the official figures reported by Caracas showed a stunning 29 percent drop, Bloomberg reported. And that reflects a widening (and worsening) gap since April.

Venezuela needs to sell oil to salvage its failing economy and avoid defaulting on its debt. But Caracas has been unable to stop a now six-year-long production decline due to insufficient investments, payment delays to suppliers and US sanctions, Reuters reported.

The “weird” discrepancy in the figures is also significant. In November, beleaguered President Nicolas Maduro – whose efforts to consolidate power have prompted local protests and international sanctions – replaced both the country’s oil minister and the head of state-oil company Petróleos de Venezuela SA.

So the massive drop in official output could represent newly appointed Major General Manuel Quevedo’s attempt to overstate the problem and thereby take credit for a modest improvement in January.