Venezuela oil recovery will take years
The guest argued that any meaningful increase in Venezuelan oil production beyond an initial 200,000 to 300,000 barrel-per-day bump will take at least three years.
The argument
The guest debunked theories that a US-backed political transition in Venezuela will immediately flood the global market and destroy OPEC. He argued that historical precedents of political turmoil show it takes years of heavy capital expenditure and technology transfer from oil majors to add 1 million barrels per day of capacity, which will easily be absorbed by global demand growth.
The thesis, stress-tested
✓ What validates it
- ✓Chevron and other majors announcing multi-billion dollar capital expenditure plans in Venezuela
- ✓US naphtha exports to Venezuela rising to facilitate heavy crude blending
▸ Risks discussed
- ▸Political instability or security issues delaying foreign oil major investments
- ▸Lack of diluent (naphtha) imports preventing heavy crude transport
Hear it yourself
"In general, when it comes to Venezuela, the immediate response that we get from Venezuela is an increase in production and exports probably by about 200 to 300,000 barrels a day above the pre crisis level, if you want to call it a crisis or whatever you want to call it, just before the Maduro arrest or before the blockade that Trump…"
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