Oil markets have so far shrugged off the death of Venezuelan President Hugo Chavez.
Energy analyst Stephen Schork says we should consider the larger damage Chavez did to his people by depriving them of vast oil revenues.
Production has been in decline for nearly a decade, he writes, ever since Chavez purged Petróleos de Venezuela (PdVSA) of talent and replaced it with “political stooges.”
It went from 3.0 million barrels per day (MMb/d) of production to as low as 0.6 MMb/d, he say. Production has yet to recover, but it may never do so:
…production has averaged around 0.5 MM/d below pre-strike levels ever since… and that’s being generous.
In return, PdVSA has left around $100 billion on the table (gross).
The situation with Venezuelan oil production has now deteriorated to the point where PdVSA stopped publishing official output statistics two years ago.
“Here’s hoping Maduro can do better,” wrote Schork about the new president. “But we doubt he will.”
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