A reader was kind enough to send me a report by Raymond James, a well respected regional broker in the US. Here is the conclusion, to a report entitled: “Muchos Problemas: Can the Venezuelan Oil Industry Survive Another Decade of Chavez?”:
“Venezuela’s 40% oil production decline since 2000 – nearly the world’s worst track record – is a story of politically motivated mismanagement on a grand scale. Chavez, in power since 1998, is poised to win re-election in 2012, and with term limits abolished, there is no end in sight to his virulently anti-business energy policy. We project a 2% production decline in 2011, with flattish production thereafter. PdVSA’s production targets of 5 MMbpd by 2015 and 6.5 MMbpd by 2020 are good for comic relief, but nothing else in our view. It would take a policy shift of drastic proportions to turn around PdVSA, and under Chavez that just ain’t happening. From a big picture standpoint, production declines in Venezuela put further downward pressure on OPEC’s already limited excess production capacity – a key element of our structurally bullish long-term stance on oil.”
I only disagree with “poised to win in 2012” we shall see…
Thanks to the anonymous reader.