Archive for August 22nd, 2003

Major newsmedia coverage of Venezuela today

August 22, 2003

It was a day for articles about Venezuela in the international press. RMG sends this article from the BBC on the Cuban Doctors in Venezuela. meanwhile Scott from Burtonterrace, always concerned about our country, sends this link from a fairly good article by The Economist on the recall referendum. I particularly like the sentence in which the author says “Mr Chávez has suddenly gone cold towards this aspect of participatory democracy“, a point that only those that live here can truly appreciate since we had to put up with Mr. Chavez’ almost daily boasts that he was such great democrat that he wanted every issue decided by the people. Not anymore. Finally, there is the article in The Wall Street Journal (by subscription) entitled “Low maintenance, investment, hamper oil output in Venezuela“. The article coincides with oil experts and even Chavez’ slip yesterday that the ccountry’s oil production is coming up short, but it does send shivers up my spine to wonder what is going to happen to our country going forward. (Daniel also has anecdotal evidence of the problems within the oil industry) Here is the lead paragraph of the article, followed by the last one:

“Venezuela’s oil production, after a surprising rebound from a midwinter, antigovernment strike, now appears to be declining because of insufficient investment, poor maintenance and a shortage of skilled workers, industry analysts contend.

A variety of estimates peg the reduction at about 500,000 barrels a day below prestrike output of three million barrels a day. The delayed, poststrike shortfall, though only one piece in a world-wide oil-supply puzzle, is contributing to currently tight global supplies, experts say.”

“The loss is mainly occurring in the older oil fields in western Venezuela near Lake Maracaibo. Many of those wells, some of which have been in production for decades, need constant maintenance and redrilling to keep operating. Others must be injected with water or natural gas to coax heavy crude to the surface. The western fields naturally lose 15% to 25% of their annual production capacity if they don’t receive costly technical attention, analysts and industry experts say. “The real production issues are poorly done maintenance and too much pumping early on,” said Roger Diwan, an analyst with Petroleum Finance Co. in Washington. “Basically, the wells are buckling, and sand is moving in the fields.”

A scary picture for a country with an extremely bleak fiscal picture.