Development and Finance from issue 2011/1

Attila Hugyecz

Oil Industry in Venezuela Between 2000-2010

- Abstract -

An interesting example for strong relation between oil industry and economic policy is Venezuela. In the economic policy of the country the activity of Petróleos de Venezuela S.A. (PDV SA) has a very important role to play. The strategy of PDV SA and the government interventions into the oil industry are not independent from each other. Most important features of PDV SA strategy between 2000-2010 have been the followings:

  1. The share of heavy oil ((<10°API) in the company’s reserves increased substantially. Verified oil stock in Venezuela is 211 bn. barrel according to 2009 OECD data.
  2. At the end of the first decade of the new millennium PDV SA distributed several heavy oil fields. According to extraction data the share of international oil companies in these projects is 13%, while that of foreign state companies is 27%.
  3. In the future heavy oil projects are planned to carry out with the participation of mostly state owned oil companies.
  4. The company is more and more interested in foreign upstream oil projects, especially in the Latin American region.
  5. PDV SA share in European oil refinery industry has decreased from 10 to 2% between 2000 and 2010 while in the Caribbean region it has increased from 11 to 20%. There are plans to build refinery capacities in the Far Eastern region and in North East of Brasilia.
  6. Crude oil selling to the North American continent has been steadily decreasing (2000: 60.6%, 2009: 38.9%), in Latin America and Far Eastern region has been increasing (2000: 33.5%, 2010: 46.3% and 2000: 0.0%, 2009: 7.2% respectively). According to reports with the company management and government officials the role of USA is expected to further decrease in the future.

Attila Hugyecz, PhD student (Corvinus University of Budapest, International Relations Doctoral School), research fellow (Institute for World Economics of the Hungarian Academy of Sciences)
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