Venezuela is one of the world's largest oil exporters and has the largest proven oil reserves in the world with an estimated 296.5 billion barrels (20% of global reserves) by 2012.
In 2008, Venezuela's crude oil production was the 10th highest in the world at 2,394,020 barrels per day (380,619 m 3 /d) and is also the world's eighth largest oil exporter. world. Venezuela is a founding member of the Organization of Petroleum Exporting Countries (OPEC).
Video History of the Venezuelan oil industry
Pre-discovery
Original use
Indigenous peoples in Venezuela, like many ancient peoples, have used crude oil and asphalt from petroleum seeps, which flowed through the soil to the surface, in the years before the Spanish conquerors. The thick black liquid, known locally as mene , is mainly used for medical purposes, as a source of light, and for the caulking of the canoe.
Spanish acquisition
Upon arrival at the beginning of the 16th century, the Spanish conquerors learned from the natives to use natural asphalt to caulk their ships as well, and to treat their weapons. The first documented oil shipments from Venezuela were in 1539 when an oil barrel was sent to Spain to relieve the gout of Emperor Charles V.
Maps History of the Venezuelan oil industry
1908-1940
Despite knowledge of the existence of oil reserves in Venezuela for centuries, the first important oil wells were not drilled until the early 1910s. In 1908, Juan Vicente GÃÆ'³mez replaced his ailing predecessor, Cipriano Castro, as president of Venezuela. Over the next few years, GÃÆ'³mez provides several concessions to explore, manufacture and refine oil. Most of these oil concessions were given to their closest friends, and they then handed them to foreign oil companies that could really develop them. One such concession was granted to Rafael Max Valladares who rented the Caribbean Petroleum Company (later acquired by Royal Dutch Shell) to carry out his oil exploration project. On April 15, 1914, after the completion of the Zumaque-I oil well (now called MG-I), Venezuela's first important oil field, Mene Grande, was discovered by Caribbean Petroleum in Maracaibo Basin. This huge discovery prompted a massive surge of foreign oil companies to Venezuela in an effort to get a share of the action.
From 1914 to 1917, several oil fields were found throughout the country including the Bolivar Coastal Coast; But World War I slowed significant industrial development. Due to the difficulty of buying and transporting necessary equipment and machinery, some oil companies were forced to drill until after the war. In late 1917, the first refinery operations began at the San Lorenzo refinery to process Mene Grande field production, and the first significant export of Venezuela's oil by the remaining Caribbean Petroleum from the San Lorenzo terminal. At the end of 1918, oil emerged for the first time on export statistics of Venezuela at 21,194 metric tons.
It was a Barroso no. 2 in Cabimas in 1922 which marked the beginning of Venezuela's modern history as a major producer. This discovery attracts the attention of the nation and the world. Soon dozens of foreign companies acquired a large area in the hope of achieving wealth, and by 1928 Venezuela became the world's leading oil exporter. Oil ended Venezuela's anonymity in the eyes of the world's rulers, making it a major milestone in the growing international oil industry and new considerations in global policy-making. Venezuelan oil production became a major factor in policy making in Washington before the Second World War.
Cabimas still plays an important role in the production of the country's largest oil field, located in and around Lake Maracaibo. Other fields are increasingly important, especially in eastern Venezuela. About twenty years after the first oil drill installation, Venezuela has become the world's largest oil exporter and, after the United States, the second largest oil producer. Oil exports rose from 1.9% to 91.2% between 1920 and 1935. By the late 1930s, Venezuela had become the world's third major oil producer, behind the United States and the Soviet Union, as well as a leading exporter..
First Dutch Disease
In 1929, the dramatic development of the Venezuelan oil industry had begun to dominate all other sectors of the economy in the country, however, agricultural production began to decline dramatically. The sudden increase of attention to oil and the neglect of this agrarian sector caused the Venezuelan economy to suffer a phenomenon which came to be known as Dutch Disease. This "illness" occurs when a commodity brings a substantial increase in income in one economic sector, leading to a strengthening of the currency which in turn is detrimental to manufacturing exports and other sectors.
Agriculture accounted for about a third of the economy's production in 1920, but by 1950 it was dramatically reduced to one-tenth. This sudden increase in oil production limits Venezuela's overall ability to create and maintain other industries. The government has ignored serious social problems, including education, health, infrastructure, agriculture, and domestic industry, causing Venezuela to fall far behind other industrialized nations.
Xenophobia
With the entry of many foreign "invaders", the effects of xenophobia that have never been seen before become clear. Novelist Jose Rafael Pocaterra describes the oilmen as "new Spaniards". He wrote in 1918:
One day some Spaniards install a dark instrument with three legs, strange cranes with crystal eyes. They draw something (on a piece of paper) and pave their way through the forest. The other new Spaniards will pave the way... will drill the earth from the top of the fantastic tower, producing a rotten liquid... liquid gold converted into petroleum.
Popular hatred of foreign oil companies is also proven and expressed in several ways. Rufino Blanco Fombona, a Venezuelan writer and politician, explained the conflict between Venezuelan workers and their foreign boss in his novel in 1927, La Bella y la Fiera:
Workers ask for a miserable raise and blue-eyed blondes who have millions of dollars, pounds, and guilders in European and US banks, refuse.
1940-1976
In 1940, Venezuela was the world's third largest crude producer with more than 27 million tonnes per year - just slightly lower than production in the Soviet Union. In 1941, IsaÃÆ'as Medina Angarita, a former army general from the Andes of Venezuela, was indirectly elected president. One of his most important reforms during his tenure was the enactment of the new Hydrocarbon Act in 1943. The new law was the first major political step taken to gain more government control over its oil industry. Under the new law, the government takes 50% of the profits. Upon ratification, this law remained essentially unchanged until 1976, the year of nationalization, with only two partial revisions made in 1955 and 1967.
In 1944, the Venezuelan government gave some new concessions that encouraged the discovery of more oil fields. This was largely due to the increasing demand for oil caused by the ongoing World War II, and in 1945, Venezuela produced nearly 1 million barrels per day (160,000 m 3 /d).
As a very enthusiastic petroleum supplier to the World War II Allies, Venezuela has increased its production by 42 percent from 1943-44 alone. Even after the war, oil demand continued to rise due to the fact that there was an increase of twenty-six million to forty million cars serving in the United States from 1945 to 1950.
However, by the mid-1950s, Middle Eastern countries began to donate large quantities of oil to the international oil market, and the United States had imposed a quota on oil imports. The world is oversupplied, and prices are plummeting.
Creation of OPEC
In response to very low oil prices in the mid and late 1950s, oil-producing nations of Venezuela, Iran, Saudi Arabia, Iraq and Kuwait met in Baghdad in September 1960 to form the Organization of Petroleum Exporting Countries (OPEC). The main goal of OPEC member countries is to work together to secure and stabilize international oil prices to ensure their interests as oil producing countries. This is managed largely through maintaining export quotas that help prevent overproduction of oil on an international scale.
Oil embargo 1973
In the early 1970s, oil-producing Persian Gulf countries began negotiating with oil companies in an effort to increase their ownership participation. In 1972 they quickly gained 25 percent participation, and less than a year later they revised the agreement to gain participation of up to 60 percent in company ownership. In 1973, members of the OPEC Gulf states decided to raise their prices by 70 percent and put an embargo on friendly countries with Israel (the United States and the Netherlands). This event is known as the oil crisis of 1973. Following the peak of the conflict in the Middle East and the Persian Gulf oil producing countries no longer export to the United States and oil prices rose sharply, Venezuela experienced a significant increase in oil production profits. Between 1972 and 1974, the income of the Venezuelan government increased fourfold. With a new sense of confidence, Venezuelan President Carlos Andrà © à © s PÃÆ'  © rez promised that Venezuela will grow significantly within a few years. By replacing imports, subsidies, and tariffs of protection, he plans to use oil profits to improve jobs, fight poverty, increase revenues, and diversify the economy. However, OPEC members have violated production quotas, and oil prices dropped again in the 1980s, pushing Venezuela deeper into debt.
Nationalization
Prior to 1976, Venezuela had taken several steps toward nationalizing its oil industry. In August 1971, under the leadership of Rafael Caldera, a law was passed that nationalized the country's natural gas industry. Also in 1971 a refund law was returned stating that all assets, factories and equipment belonging to concessionaires inside or outside the concession area would be returned to the state without compensation after the expiration of the concession. The movement towards nationalism is experienced once again under decree 832. Decision 832 stipulates that all oil exploration, production, refining, and sales programs must be pre-approved by the Mining and Hydrocarbon Ministries.
Nationalization became official when the presidency of Carlos AndrÃÆ'Â © s PÃÆ' Â © rez, whose economic plan, "La Gran Venezuela", called for the nationalization of the oil industry and economic diversification through import substitution. The country officially nationalized its oil industry on January 1, 1976 at the site of Zumaque oilwell 1 (Mene Grande), and at the same time was born PetrÃÆ'³leos de Venezuela S.A. (PDVSA) which is Venezuela's state-owned petroleum company. All the foreign oil companies that have ever done business in Venezuela are replaced by Venezuelan companies. Each former concessionaire was only replaced by a new 'national' oil company, which retained the structure and function of its multinational corporation (MNC) - an introduction.
All new companies are owned by parent company-Petroven or PDV- and are in turn owned by the State. In the end nothing much changes in this regard, as all Venezuelan people with prominent positions in MNC take over the leading positions of each new company, and therefore still secure their interests in Venezuela's oil. PDVSA controls activities involving oil and natural gas in Venezuela. In 1980, in an aggressive internationalization plan, PDVSA purchased refineries in the US and Europe as Citgo America which catapulted them to the world's third largest oil company.
1977-1998
After the 1973 oil crisis, the period of economic prosperity for Venezuela was relatively short-lived. As Venezuela's oil minister and OPEC founder Juan Pablo PÃÆ'Ã… © rez Alfonzo has warned in 1976: "Ten years from now, twenty years from now, you will see, oil will bring us harm... This is satanic filth. " This is the case during the" oiliness of the 1980s ". OPEC member countries do not stick to the quota assigned, and once again the price of oil falls.
Second Dutch Disease
During the mid-1980s, Venezuela's oil production continued to rise. In the 1990s, symptoms of Dutch disease once again became clear. Between 1990-99, Venezuelan industrial production declined from 50 percent to 24 percent of the country's gross domestic product compared to a 36 percent decline to 29 percent for other Latin American regions, but production levels continued to increase until 1998.
However, PDVSA efficiency is questioned during these years. During 1976-1992, the amount of PDVSA revenues that went into company costs an average of 29 percent leaving the remaining 71 percent for the government. From 1993 to 2000, the distribution was almost completely reversed, where 64 percent of PDVSA's revenue was kept by PDVSA, leaving the remaining 36 percent for the government.
1999-present
After Hugo ChÃÆ'¡vez officially took office in February 1999, several policy changes involving the state oil industry were made to explicitly tie it up with the country under its Bolivarian Revolution. Since then, PDVSA has not demonstrated any ability to bring new oil fields in the river since the national oil project on the Orinoco Petroleum Belt formerly operated by the international oil companies ExxonMobil, ConocoPhillips, Chevron, and Total. ChÃÆ'¡vez policy undermines Venezuela's oil industry due to lack of investment, corruption and cash shortage.
The ChÃÆ'¡vez government uses PDVSA resources to fund social programs, treats them like "piggy bank", and PDVSA staff are asked to support ChÃÆ'¡vez. Its social policy resulted in excessive spending that caused shortages in Venezuela and allowed the inflation rate to grow to one of the highest rates in the world.
According to Corrales and Penfold, "ChÃÆ'¡vez is not the first president in the history of Venezuela to be fascinated by the oil promise, but he is the one who let this sector go down the most", with most statistics showing the industry's decline from the start his presidency.
The successor of ChÃÆ'¡vez, NicolÃÆ'¡s Maduro, continues many of the policies made by ChÃÆ'¡vez, with Venezuela getting worse as a result of continuing the policy.
OPEC Strengthening
By the time of ChÃÆ'¡vez's election, OPEC had lost much of its influence over when it was first created. Combined OPEC members, including Venezuela, regularly ignore quotas and non-OPEC countries like Mexico and Russia that are starting to thrive on their own petroleum industry produced record low oil prices that hurt Venezuela's economy. One of ChÃÆ'¡vez's main aims as president is to combat this issue by reinforcing OPEC and making countries once again abide by their quota. ChÃÆ'¡vez personally visited many of the leaders of oil producing countries around the world, and in 2000, he hosted the first summit of the OPEC heads of state in 25 years (the second time). The objectives of this meeting, held in Caracas, include restoring Venezuela's credibility at OPEC, defending oil prices, consolidating relations between Venezuela and the Arab/Islamic world, and to strengthen OPEC in general.
The meeting could be considered a success given the record high oil prices in subsequent years, but much of it is also a consequence of the September 11, 2001 attacks on the United States, the Iraq War, and a significant increase in oil demand from emerging economies such as China and India, which helped drive oil prices to a much higher level than those targeted by OPEC over the previous period. In addition to these events, the December 2002 oil strike in Venezuela, which resulted in the loss of almost 3mmbpd of crude oil production, brought a sharp increase in world crude oil prices.
Enabling action and controversy laws
In 2000, the National Assembly pro-ChÃÆ'¡vez gave ChÃÆ'¡vez the ability to rule with a decision due to poor economic conditions. On 13 November 2001 when governing by decree, ChÃÆ'¡vez enacted a new Hydrocarbon Act, which came into force in January 2002. The law "marks a turning point in public sentiment against the president" with both chavistas and anti-chavistas angry at change. For opposition to ChÃÆ'¡vez, such dramatic changes to the government prove to them that ChÃÆ'¡vez is "dictator-in-training".
ChÃÆ'¡vez began setting goals to restore quotas, such as ten percent of the annual PDVSA investment budget spent on social programs. He also changed tax policies and the process of collecting oil revenues. Chavez embarked on many of these major changes to use more control over PDVSA and efficiently address the issues he and his supporters have had for PDVSA's small revenue contribution to the government. In 2002, the caveats grew from ChÃÆ'¡vez overspending on social programs to maintain populist support.
In December 2002, PDVSA formally broke down to create an end to oil production in Venezuela. The general goal of Venezuela's 2002-2003 strike was to pressure ChÃÆ'¡vez to resign and called for early elections. The strike lasted about two and a half months, and the government eventually fired 12,000 PDVSA employees and replaced them with workers loyal to the ChÃÆ'¡vez government, many of whom are out of retirement to replace the dismissal. In January 2002, protests involving hundreds of thousands of Venezuelans opposed to ChÃÆ'¡vez became common in Venezuela. In April 2002, mass demonstrations took place in Caracas and ChÃÆ'¡vez were temporarily ousted by the military during the 2002 Venezuelan coup attempt.
A few months after the failure of the coup and the return of Chavez, a union of trade unions and business groups called for "an unlimited national strike" which, in many places, turned into a "forced locksmith" in which employees were banned from work. When the strike ended, massive macroeconomic damage had been done with unemployment rising 5 percent. This increase brought the country to a national unemployment peak of more than 20 percent in March 2003.
After the strike, ChÃÆ'¡vez was called to regain control of the industry as a "re-nationalization". He aims to improve the efficiency of PDVSA in the context of distributing more of its income to its government and also by certain changes in taxation. Certain tax reforms have been implemented earlier in ChÃÆ'¡vez's first term. In 2006, the government owned 40 percent of the shares, which were announced to increase by 20 percent.
International offer
In 2005, PDVSA opened its first office in China, and announced plans to nearly triple the oil tanker fleet in the region. ChÃÆ'¡vez has long stated that he wants to sell more of Venezuela's oil to China so that his country can become more independent of the United States. In 2007, ChÃÆ'¡vez made a deal with Brazilian oil company Petrobras to build an oil refinery in northeastern Brazil where crude oil will be shipped from Brazil and Argentina. A similar deal was hit with Ecuador where Venezuela agreed to refine 100,000 barrels (16,000 m 3 ) of crude oil from Ecuador at a discount. Cuba agreed to let thousands of Venezuelans be accepted for medical care and health programs, and in turn, Venezuela agreed to sell several thousand barrels to Cuba at a 40% discount under the Petrocaribe program.
Third Dutch Disease
The ChÃÆ'¡vez government used high oil prices in the 2000s over its populist policy and to gain support from voters. The social work initiated by the ChÃÆ'¡vez government relies on oil products, the economic keystones of Venezuela, with the ChÃÆ'¡vez government that suffers from Dutch disease as a result.
According to Cannon, the country's revenue from oil revenues grew "from 51% of total revenue in 2000 to 56% 2006"; oil exports increased "from 77% in 1997 [...] to 89% in 2006"; and his government's dependence on oil sales is "one of the main problems facing the ChÃÆ'¡vez government". In 2008, everything exports except oil "collapsed" and in 2012, the World Bank explained that Venezuela's economy is "extremely vulnerable" to changes in oil prices since 2012 "96% of state exports and nearly half of its fiscal revenue "depending on oil production.
Economists say that Venezuelan government spending on social programs and strict business policies contribute to the imbalance in the country's economy, contributing to rising inflation, poverty, low health care spending and shortages in Venezuela into the last years of its presidency.
Since 2014, oil production in Venezuela has suffered from poor oil markets and insufficient Venezuelan industrial funding. Venezuela's nationalist oil policies have not succeeded in making them more independent of their oil customers. In 2016, the United States imported 291.461 million barrels of oil from Venezuela, a number consistent with imports in the preceding five years. To ease the decline in oil prices that resumed in June 2014 and continues to this day, President Maduro scored more currencies, resulting in inflation as high as 700% of what the inflation rate was in 2014. Economic Policy of Nicolás The Maduro government did not revive decline in oil, and by 2016, oil production hit its lowest in 23 years. According to analysts, the economic crisis in Venezuela (2012-present) suffered under President NicolÃÆ'¡s Maduro will remain with or without ChÃÆ'¡vez.
By 2017, PDVSA is not even capable of exporting international water oil, which requires safety inspection and cleaning under maritime law, with a fleet of tanker shipwrecked in the Caribbean Sea due to this problem. In July 2017, this arrangement was extended from only the first half of 2017 that continued into March 2018. The sustained depression in oil revenues has caused Maduro to suppress OPEC to raise falling oil prices to help the Venezuelan economy. In April 2017, the controversial decision by the Supreme Court of Venezuela granted executive power to Maduro over PDVSA, allowing him to act autonomously in selling shares or making international oil company agreements. In October 2017, Venezuela had the lowest oil output in 28 years, with only 1.863 million bpd pumped that month. By the end of 2017, PDVSA is struggling to pay $ 725 million in debt, part of a total of $ 5 billion, despite the fact that Venezuelan citizens are experiencing an ongoing famine.
By 2018 as a result of deficiencies in Venezuela, undernourished oil workers are too weak to do their daily tasks, with many people starting to collapse at work.
See also
- CorporaciÃÆ'³n Trebol Gas C.A.
Note
References
- Painter, David S. (2012). "Oil and the American Century" (PDF) . The Journal of American History . 99 (1): 24-39. doi: 10.1093/jahist/jas073.
- Randall, Laura (1987). Venezuelan Political Oil Economy . New York, NY: Praeger. ISBN 978-0-275-92823-0.
Source of the article : Wikipedia
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