During an interview in 2012, then-Venezuelan President Hugo Chavez predicted that by 2019 his country would be producing six million barrels of oil per day.
That date has come, and Venezuelan production is a much smaller part than the late president predicted, and it is also going through a process of incessant decline.
According to the latest report from the Organization of Petroleum Exporting Countries (OPEC), Venezuela's oil extraction was 742,000 barrels a day in July, just over half of 2018 (1.35 million) and almost one third of 2017 (1.9 million).
The reduction was most notable in exports, from which Venezuela used to pocket nine out of every ten dollars entering the country.
According to Bloomberg data, Venezuelan oil sales dropped in September to 495,000 barrels per day – a return to around 1950, when it was about 489,000 barrels per day.
Data collected by ClipperData, a company that specializes in monitoring global maritime oil transportation, confirms the drop in Venezuelan oil exports to 492,000 barrels per day.
These numbers put Venezuela behind Brazil and Mexico in oil exports from Latin America.
But why did Chavez's expectations not be met?
US general strike and sanctions
"Exports fell mainly due to lack of production in Venezuela and, more recently, as a result of the restrictions the United States has imposed on Venezuela," says Jorge Piñón, director of the Center for International Energy and Environment Policy at the University of Texas, In the USA.
The expert attributes the decline in production also to the "politicization" of state-owned oil company PDVSA that took place during Hugo Chávez's rule.
"The company should have maintained a business management, commercial, with a long-term vision – not political. From this politicization, which began in 2003, comes this decline," he explains.
In February 2002, Chavez named as president of the company Gastón Parra, a leftist economist specializing in oil – but who was viewed as an outsider.
The state management at the time protested against the appointment of other leaders who, according to the critics, had been raised not on their merits but on the proximity of the government.
The confrontation escalated and, at the end of the year, ended in a general strike lasting about two months. Chavez then fired about 20,000 of the company's 35,000 employees.
Economist José Toro Hardy, who was one of PDVSA's directors until Chávez came to power, points out that another factor that caused the decline in production was the Hydrocarbons Law, passed in 2008.
With this regulation, the government changed the terms of its associations with foreign oil companies operating in the country, expropriating some while others left after agreements.
"Since then, production has been declining. Last year and the year before, there has been a sharp reduction; and by 2019, the situation has become even more complicated, especially by sanctions imposed by the United States," says Toro Hardy.
With the intention of economically smothering the government of President Nicolás Maduro, whom it considers illegitimate, the White House has since the beginning of this year imposed a series of sanctions against PDVSA. This discouraged many foreign companies from working with the Venezuelan company.
"There are fewer and fewer tankers willing to risk loading oil from Venezuela," says Toro Hardy.
The specialist explains that, with the difficulties of exporting, PDVSA started to store its production more in tanks and ships anchored in its coasts, but apparently the storage capacity was reached, so that there was no choice "except to decrease the production. production".
Matt Smith, ClipperData's director of raw materials research, attributes the drop in Venezuelan exports to "a combination of lower production and declining market interest in its low quality oil."
"Despite this, the barrels are still coming to China, India and certain destinations in Europe. Despite the sanctions, Cuba is still also a recipient (of Venezuelan oil)," he says.
Citing Refinitiv Eikon estimates and internal PDVSA data, Reuters said on Wednesday that PDVSA oil exports increased slightly in September, partly due to exports to Cuba, but not enough to reduce large accumulated stocks.
Effects for the country: 'It's terrible'
Toro Hardy points out that the drop in oil exports has a strong effect on the Venezuelan economy.
"For the country, it's terrible, because almost 97% of the foreign currency that came into the country came from oil," he says.
"This leads to a very complex situation because it is an economy that is increasingly dependent on foreign exchange, since Chavismo expropriated more than six million hectares of agricultural production that were productive. Therefore, a large part now needs to be imported. of food. "
The expert says that if sales have actually fallen below 500,000 barrels a day, this consolidates the country's exit from the world's most important oil-exporting countries and into the small category.
Jorge Piñón warns of the risks that this persistent downward trend in production and exports entails.
"This has a critical impact, because if the time comes, and it may be close, if there is a need to close the oil fields, it will be very difficult to restore previous production," he says.
Piñón says that in the oil segment, closing wells is considered a bad decision because trying to reactivate them never regains previous levels.
The expert also warns that if this trajectory is maintained, it may reach a point where "Venezuela can no longer produce oil".
"The only place something like this happened was in Libya, but it was because of a war, not because of mismanagement of an asset," he said.