I was interviewed today by CNNMoney’s Matt Egan on what OPEC should expect from US shale as they hold their 169th “Ordinary Meeting” in Vienna tomorrow (2 June). Indeed, at some point oil production and demand will balance (likely in 2017), and then the Saudis and OPEC will have to cautiously test the presently unknown dynamics of high-tech US shale on the rebound. -Egan cites my point of view in his article. Read on … – Tom O’D.
Don’t bet against the resilience of U.S. oil companies
by Matt Egan @mattmegan5 CNNMoney (New York) June 1, 2016: 12:23 PM ET
Many expected U.S. oil output would collapse under the weight of a lengthy price war with the mighty OPEC, the fractured oil cartel that’s meeting in Vienna Thursday.
The U.S. oil boom, fueled by the shale revolution, has obviously taken a few punches from OPEC’s strategy of all-out pumping. But the latest numbers show that American production continues to remain stubbornly high in recent months despite the crash in crude to as low as $26 a barrel in February.
The U.S. pumped 9.13 million barrels per day in March, down by a miniscule 6,000 barrels from the prior month, according to stats released this week by the U.S. Energy Information Administration. That represents a deceleration from recent monthly declines. By comparison, daily U.S. output dropped by 58,000 barrels in February and by 83,000 barrels in December.
Posted in Energy and Geopolitics, Global Oil Market, Global Oil system, High technology, Oil prices, Oil supply, OPEC, Saudi Arabia, shale oil, The USA, Tight oil, U.S. oil, Uncategorized
Tagged Ali Al-Naimi, Heavy crude oil, oil market, oil price, OPEC, Petróleos de Venezuela, Saudi Arabia, shale oil, Technology, United States, us shale, USA
Last week, Energy Intelligence (EI) quoted me on China’s continued appetite for oil and gas investments in Latin America even with its own economic slowdown and LatAm’s many political upheavals. (Sincere thanks to EI for a PDF of their proprietary Energy Compass to share on my blog. You can access it below here.)
Some thoughts on China’s strategy: In the case of Venezuela, as the price of oil fell, Beijing quickly eased up on PDVSA’s repayment terms for its huge outstanding loans which are repayable in oil. This shows some willingness to help Venezuela cope with the falling market value of oil. Why? Because, mainly, it is the oil that China has always been laser-focused on – not making interest on these loans.
Generally, it is clear that new Chinese investments or loans are still possible in Latin America. In Venezuela however, Continue reading
Posted in Brazil, Chavez, China, Economic Crisis, Energy and Geopolitics, Faja of the Orinoco, Global Oil Market, Global Oil system, heavy oil, Hugo Chávez, Latin America, Oil prices, OPEC, PDVSA, PDVSA weakness, Rosneft, Russia, Sechin, shale oil, The USA, Uncategorized, Venezuela oil
Tagged Beijing, Caracas, Chavez, China, Energy, Heavy crude oil, Hugo Chávez, Latin America, Nicolás Maduro, oil sector, OPEC, PDVSA, Petróleos de Venezuela, United States, USA, Venezuela
Russian Production & Stakes in Venezuelan Oil Projects (40% stake is limit)
Last October & November I succeeded in interviewing several people in the Venezuelan private sector directly knowledgeable of Russian oil projects with PDVSA. Many Venezuelans wonder what all the Russians-known for their secrecy-are up to there. Some of my key findings are in Americas Quarterly‘s Winter 2016 edition. Read on …
Russia Is Beating China to Venezuela’s Oil Fields – By THOMAS W. O’DONNELL
The profits, politics and luck behind Russia’s growing footprint.
The late Venezuelan President Hugo Chávez, had long envisioned China becoming Venezuela’s biggest oil-sector production partner. So when Rafael Ramírez, then president of Petróleos de Venezuela, S.A. (PDVSA), announced in January 2013 that Russia would produce enough oil with PDVSA by 2021 to become “the biggest petroleum partner of our country,” very few people believed him. It sounded like empty hype.
Yet it turns out that Ramírez was serious. Three years later, Russian companies are already producing more oil in joint projects with PDVSA than their Chinese counterparts. Official figures are either unreliable or unavailable, but according to field data provided by Global Business Consultants (GBC), a Caracas-based energy consulting firm, Russia-Venezuela production as of late 2015 was 209,000 barrels per day (bpd), compared to China-Venezuela’s at a bit over 171,000 bpd.
Posted in Chavez, Chavez lagacy, China, Energy and Geopolitics, Energy and Geostrategy, Faja of the Orinoco, Global Oil Market, heavy oil, Hugo Chávez, international relations, PDVSA, PDVSA weakness, Putin, Rosneft, Russia, Sanctions, Sechin, Uncategorized, Venezuela oil, Zulia
Tagged China, geopolitics, Hugo Chávez, oil sector, PDVSA, Petróleos de Venezuela, Venezuela
PDVSA president, Eulogio Del Pino, meets to “consolidate the new PDVSA.” (@delpinoeulogio Aug 11)
Mery Mogollon quotes me several times on PDVSA’s trajectory in Platt’s September Energy Economist. Here it is:
Venezuela, South America’s biggest oil producer, has seen the value of its oil exports fall to its lowest level since 2004. The economy faces hyperinflation and increasing shortages of basic goods. Debt default seems highly likely. State oil company PDVSA has neither the institutional capacity nor the funds to expand oil production. It is a downward spiral that will lead to political change. Continue reading
Posted in Faja of the Orinoco, Global Oil Market, heavy oil, Oil prices, OPEC, PDVSA, PDVSA weakness, Venezuela oil
Tagged Eulogio Del Pino, Heavy crude oil, Nicolás Maduro, oil sector, OPEC, PDVSA, Petróleos de Venezuela, Venezuela
Falling oil prices are not a US-EU-Saudi plot against Russia, Iran and Venezuela… though their effect is certainly not unwelcomed..Foto: REUTERS/Jim Bourg
[Printed in IP Journal, German Council on Foreign Affairs] Pin-pointing the reason for the dramatic – and continuing – fall in the price of oil is relatively easy: OPEC held its 166th conference in late-November 2014 to decide on a strategy to address oil prices, which had been falling at five to ten percent per month since July. Rather than pursue a production cut
Posted in Chavez, Energy and Geopolitics, Euroepen Union, Global Oil system, international relations, Iran nuclear, Oil prices, Oil supply, OPEC, PDVSA, Persian Gulf, Putin, Resource conflicts, Russia, Sanctions, Saudi Arabia, The USA
Tagged Ali Al-Naimi, Business and Economy, Chavez, Energy, geopolitics, Iran, Middle East, oil sector, OPEC, Petróleos de Venezuela, Rafael Ramírez, Saudi Arabia, United States, Venezuela, Washington
Here’s my piece [in Spanish] in Petroguía 2015, the oil-&-gas sector catalog for Latin America Note: Hemispheric integration (e.g., energy infrastructure) was endlessly promoted by Hugo Chavez. In the end, he built none. The region’s resources continue going mainly to develop other regions, such as China. Continue reading
Posted in Brazil, Chavez, China, Colombia, Ecopetrol, Gas globalization, Global Oil Market, Latin America, Latin America and Caribbean, LNG, PDVSA, Petrobras, The USA, Trade policy, Uncategorized
Tagged Beijing, Chavez, China, Energy, energy infrastructure, Heavy crude oil, Hemispheric integration, Hugo Chávez, Latin America, oil sector, PDVSA, Petróleos de Venezuela, South America, Venezuela
If you’re in New York: Luiz Pinto and I speak at Columbia University’s Institute for Latin American Studies (ILAS) on post-Chavez Venezuela, 12-noon, Thursday, 9 October:
Posted in Chavez, Chavez lagacy, Chavez legacy, heavy oil, Hugo Chávez, Latin America, Leopoldo López, Maracaibo, PDVSA, PDVSA weakness, Uncategorized, Venezuela oil, Venezuela update, Venezuelan Democracy
Tagged Caracas, Chavez, Chavismo, Columbia University's Institute for Latin American Studies, Heavy crude oil, Hugo Chávez, Latin America, Maracaibo, Nicolás Maduro, oil sector, PDVSA, Petróleos de Venezuela, Rafael Ramírez, Venezuela
Last week, I was quoted in the Wall Street Journal on why Petróleos de Venezuela SA (PDVSA) is looking to sell its Citgo refining affiliate in the USA. The key motivation, in my estimation, is to finance projects critical to … Continue reading
Note: I’m teaching a post-graduate course “The Global Oil System & US Policy” at JFK Institute of Freie U. in Berlin. In order to give students a feel for how US energy policy is developed–and to see the views of important US actors–I’m sending them frequent e-mails with supplemental readings and videos from US think tanks, US government offices and from the US media on energy topics.
These are not my own in-depth analysis like I usually post on GlobalBarrel.com. However I think they are worthwhile sharing with especially non-USA followers of my blog. I’ll title these posts “USA OIL” plus a number to label them). I hope these are useful. Here’s today’s ‘optional material’ I sent to my students:
How is US energy policy developed? You might find this video of interest.
Some background: The CSIS (Center for Study of International Security) is a non-partisan (i.e., not Democratic or Republican) think tank in Washington, DC. It performs an important role in US foreign policy. Continue reading
Posted in Energiewende, Energy and Environment, Energy and Geopolitics, Energy and Geostrategy, Euroepen Union, European Union, Germany, Global Oil Market, Global Oil system, international relations, Iran nuclear, Oil course, Persian Gulf, Putin, Russia, Saudi Arabia, Saudi Arabit, The USA, Trade and Commerce, Trade policy, U.S. oil, Ukraine, Uncategorized, unconventional energy
Tagged Beijing, Berlin, China, CSIS, Energy, energy issues, foreign policy, Germany, Iran, JFK Institute of Freie U., Middle East, Obama, oil sector, OPEC, Petróleos de Venezuela, Saudi Arabia, United States, US energy policy, Washington, Zbigniew Brzezinski
Venezuelan President Nicolas Maduro speaking during the first UNASUR-and-Vatican mediated peace talks with the opposition in Caracas 10 April (Reuters)
Here’s my commentary at Americas Quarterly today, 11 April:
A delegation of foreign ministers from the Union of South American Nations (UNASUR) returned to Caracas on April 7 and 8, securing an agreement to hold peace talks to calm political polarization and protests in Venezuela. The talks are being mediated by the foreign ministers of Colombia, Brazil and Ecuador, plus a Vatican representative.
The UNASUR delegation first visited in late March, recommending that Venezuelan President Nicolás Maduro and leaders of the opposition’s Mesa de Unidad Democrática (MUD) enter into a dialogue. The U.S. State Department had expressed support, as had Organization of American States (OAS) General Secretary José Miguel Insulza.
However, UNASUR’s plan will be complicated by Maduro’s reliance on paramilitaries within his Partido Socialista Unido de Venezuela (United Socialist Party of Venezuela—PSUV), whose loyalty requires his polarizing words and deeds. This conundrum already wrecked a previous dialogue.
In early February, before protests broke out, a highly placed government official explained to me, … CLICK to Continue Reading at Americas Quarterly. Continue reading
Posted in Chavez, Chavez legacy, Energy and Geostrategy, Henry Capriles, Hugo Chávez, Latin America, Leopoldo López, PDVSA, The USA, Uncategorized, Venezuela update, Venezuelan Democracy
Tagged Caracas, Chavez, Chavismo, Hugo Chávez, Latin America, Nicolás Maduro, PDVSA, peace talks, Petróleos de Venezuela, UNASUR, Union of South American Nations, United States, Venezuela, Venezuelan President Nicolas Maduro
Americas Quarterly today carries a followup that to my 29 August piece on Post-Chavez changes at PDVSA.
Drilling rig (PDVSA)
NOTE: During the past couple weeks, while in Maracaibo and Caracas, I was repeatedly told of a new offshore payment mechanism that PDVSA has begun offering to its Joint Venture foreign partners. Venezuelan private sector leaders took credit for the general idea. Continue reading
Posted in Chavez, Chavez lagacy, Chavez legacy, China, Faja of the Orinoco, heavy oil, Hugo Chávez, Latin America and Caribbean, Maracaibo, PDVSA, Trade and Commerce, Venezuela oil, Zulia
Tagged Americas Quarterly, Caracas, Maracaibo, Nicolás Maduro, PDVSA, Petróleos de Venezuela, Twitter, Venezuela
PDVSA oil rigs in Venezuela (TalCual)
Throughout 2012, and especially after President Hugo Chávez’ death in early March 2013, Venezuela’s national oil firm, Petróleos de Venezuela S.A. (PDVSA), has taken measures beyond anything done in the past decade to raise its lagging production. While the likely impact merits cautious analysis, the drivers of the Bolivarian Republic’s scramble for increased oil revenues are clear. … Continue reading
Posted in Chavez, Chavez lagacy, Chavez legacy, China, Faja of the Orinoco, Gaddafi, heavy oil, Latin America and Caribbean, Libya, Maracaibo, Oil prices, OPEC, PDVSA, PDVSA weakness, The USA, U.S. oil, Venezuela oil, Zulia
Tagged Beijing, Carabobo, Caracas, China, Heavy crude oil, Hugo Chávez, Nicolás Maduro, OPEC, PDVSA, Petróleos de Venezuela, president hugo chavez, Rafael Ramírez, South America, United States, Venezuela, Venezuelan
Venezuela’s troubled national oil company, PDVSA — Post-Chavez Reforms ?
What’s the future of PDVSA post-Hugo Chavez? My comments to Platts Energy writer Mery Mogollon were quoted in detail today in Oilgram News. A JPEG image is below (click it to enlarge). My thanks for permission to post it here. Continue reading
Posted in Chavez, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Hugo Chávez, international relations, PDVSA
Tagged Hugo Chávez, PDVSA, Petróleos de Venezuela, Venezuela
Groundbreaking, PetroChina-CNPC refinery for PDVSA heavy oil. It is to be China’s largest. (April 2012)
Over the past few weeks, I have been looking at the state of the Venezuelan-Chinese oil alliance that Hugo Chavez has so fervently championed. The picture that emerges is not what one might expect. Here is an overview, in qualitative terms. [Correction: I originally wrote Ramirez reported that PDVSA produced “60,000” new barrels of Faja oil in 2013. He actually said “20,000”.]
A. Structural Changes – Vertical Integration with China
Till now, commentators have looked primarily at the obligations of the Bolivarian Republic of Venezuela (BRV) to send oil to China to repay Beijing’s huge loans. However, there are major changes afoot in the structure of this relationship, no matter who succeeds Hugo Chavez. Developments on the ground in both countries show an energy infrastructure buildup will soon bring significant cross-border vertical integration. Soon, Venezuelan oil will not be shipped to China simply to fulfill financial-and-contractual obligations, but also for locked-in infrastructural reasons.
All indications are that the Chinese side is actively fulfilling the obligations it entered into ca. five years ago (esp. December 2007) to build oil tankers, pipelines and refineries in China in order to import and process Venezuelan heavy crude.
Posted in Chavez, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Hugo Chávez, PDVSA, U.S. oil, Uncategorized
Tagged Heavy crude oil, Hugo Chávez, oil sector, People's Republic of China, Petróleos de Venezuela, Rafael Ramírez, United States