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Analysis: Venezuela's exports to U.S. down
Miami (UPI) Jul 2, 2008 Venezuelan oil exports to the United States are continuing to decline at a record rate, according to a report released by the U.S. Energy Information Administration. Exports of both crude and other petroleum products from South America's largest oil producer reached a five-year low, falling by 11.7 percent in the first four months of 2008 compared with the same period last year. In 2007 Venezuela exported 1.28 million barrels per day of oil and other petroleum products to the United States from January through April. During the same period this year, export levels dropped to 1.13 million bpd, the EIA reported. Venezuelan energy officials, as well as President Hugo Chavez, have made clear in recent months their intention to reduce exports to the United States while at the same time searching for alternative customers such as oil-hungry nations like China. Venezuela's exports to China are currently at an estimated 250,000 bpd, with the goal of increasing sales to half a million daily by 2010, said Venezuelan officials at the state-run energy firm PDVSA. Some consider the trend towards decreasing shipment sizes to the United Sates a sign that Caracas hopes to one day forego U.S. oil sales altogether. Earlier this year, during a heated multibillion-dollar row between PDVSA and U.S. oil giant ExxonMobil over Venezuela's seizure of the oil company's project during its nationalization of the sector, Venezuela threatened to end oil exports to the United States altogether. While the war of words sparked fears in the U.S. oil sector and helped drive up prices domestically, most analysts concluded that Venezuela's bluster over the ExxonMobil case and threat of cutting off supplies was more posturing than a real possibility. As the fourth-largest exporter to the United States, Venezuela can hardly afford to shut off supplies to the United States, even for a short while, said Patrick Esteruelas, a Latin America analyst for the New York-based think tank Eurasia Group. "The Venezuelan government has become more and more dependent on oil, and oil exports to the U.S. in particular, making it highly unlikely that Venezuela will cut off oil supplies to the U.S. despite the latest threats," Esteruelas said following the ExxonMobil standoff. However, Venezuela had already decreased its exports to the United States in recent years, a result of production shortcomings, according to some PDVSA officials. In July, Luis Vierma, exploration and production vice president at PDVSA, said Venezuelan oil faces a "significant operational emergency" if it does not increase the number of rigs operating in the country and that the state firm fell short of its 2007 goal of getting 191 rigs online in 2007 and producing some 3.3 million bpd. Many contend that the additional strains placed on PDVSA in 2007 were the cause of production shortfalls last year. Chavez last spring implemented a wide-reaching agenda calling for the restructuring of contracts with private-sector oil companies operating in Venezuela, whereby PDVSA would assume a majority share of current projects and subsequent projects. But instead of reinvesting that money into the sector, Chavez has opted to spend it on social programs at home and discounted oil for neighboring countries that share his political agenda. At the same time, Chavez has made clear his intention to reduce his country's dependency on the United States as a petroleum customer by actively courting other countries like China, whose energy needs are expected to increase exponentially in the next decade. Meanwhile, analysts like David Pumphrey, deputy director and senior fellow for the energy program at the Center for Strategic & International Studies in Washington, said the reduction of U.S. exports was more likely the result of production shortcomings and not political rhetoric. "I don't think we have direct evidence that relations (between Venezuela and the United States) have anything to do with it," Pumphrey told United Press International. Related Links Powering The World in the 21st Century at Energy-Daily.com
Iran warns about attack amid mixed signals on nuclear crisis
Madrid (AFP) July 2, 2008Iran warned Wednesday of a fierce response and radically higher oil prices if the country was attacked, but also signalled possible progress in its five-year nuclear standoff with the West. |
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