From Bloomberg

The plot, code-named Operation Constitution, involved scores of captains, colonels, and generals from all four branches of Venezuela’s armed forces. The goal was straightforward and seismic—to capture President Nicolás Maduro and put him on trial. The plotters, wearing blue armbands marked OC, were supposed to storm the presidential palace and main military base and stop the May 20 presidential election. Some of the planning took place in Bogotá, but Colombian and U.S. officials, who allegedly knew about the plot and winked from the sidelines, declined to provide active support.

Then something went wrong. In mid-May, several dozen servicemen, including one woman, as well as a couple of civilians, were secretly arrested—some have been accused of treason—and imprisoned by a military court. Many say they’ve been tortured. The plotters believe they were betrayed, possibly by a double agent. This reconstruction of the conspiracy is based on interviews with one plot coordinator who escaped arrest, two who attended planning sessions, and lawyers and relatives of the accused. All spoke on condition of anonymity, fearing for their safety. Bloomberg also viewed a military court report laying out the government’s version of events; it corroborated many of the plotters’ accounts.

Details of the failed coup, probably the biggest threat to Maduro in his five years in office, haven’t been reported before, though a military blogger in the country has alluded to it. Once rich and relatively democratic, socialist Venezuela has devolved into a dysfunctional, authoritarian petrostate. The country is beset by hyperinflation and severe food and medicine shortages. Hundreds of thousands have fled to neighboring Colombia, which for decades battled Marxist guerrillas backed by Maduro and his predecessor, Hugo Chávez, who himself led a failed coup against the Venezuelan government in 1992. A decade later, as president, he beat back a coup.

Some members of the Venezuelan military say the only hope for a return to stability is to replace Maduro by force. That remains unlikely after the coup’s failure. The president holds sway over all major institutions; he’s never been a military man but has worked hard to win the loyalty of top brass. And while his reelection in May was widely condemned as fraudulent, it reaffirmed the sense that he’s firmly in power. The coup attempt, however, indicates that parts of the security services are roiling with discontent—and Maduro has taken note. At a military parade on June 23 he declared, “It’s time to close ranks and dig in against treason! We need a united military loyal to the glorious country of Venezuela and its legitimate commander-in-chief!”

The military tribunal report on the plot, participants say, contains both fact and fiction. Its key assertion is undisputed: In May high-ranking officers from all four branches of the security services attempted an insurrection. But those interviewed reject the most dramatic claims, including that the U.S. and Colombian governments provided financial backing and that there was a separate plot, Operation Armageddon, which called for Maduro’s assassination at a military parade in July 2017.

The U.S. has “no intent to destabilize or overthrow the Venezuelan government,” says a State Department spokesperson, but wants “a return to a stable, prosperous, and democratic Venezuela.” Speaking in Texas in February, as coup preparations were coming to a head, then U.S. Secretary of State Rex Tillerson noted that militaries in Latin America frequently step in during crises. “If the kitchen gets a little too hot for [Maduro], I am sure that he’s got some friends over in Cuba that could give him a nice hacienda on the beach,” he said. Both Colombia and Venezuela declined to comment.

The military prosecutor asserts that María Corina Machado, a top opponent of Maduro’s, took part in the plot. She and the participants say this is fiction aimed at besmirching and possibly jailing her. “This regime is once again trying to incriminate me,” Machado says in an interview in Caracas. “I have no connection to these plots. They want to silence my voice, because I have labeled them a narco-dictatorship. I want to be clear: I want Nicolás Maduro out of power immediately. But I want him out alive so he can face the justice that his regime has denied to Venezuelans.” Both the government and the plotters have reason to exaggerate as well as to downplay what happened: The plotters want foreign support and more officers to join the next effort and hope to protect those who’ve been caught. The government seeks to justify a purge, which has begun, while claiming to be in full control.

Participants say the coup was first planned for April 2017 to stop Maduro from expanding his powers over Venezuela’s legislature. But an unrelated and much smaller military rebellion caused the participants to pull the plug. Planning continued into 2018, with secret meetings being held in homes in an upscale part of Caracas. At one point, a participant snuck across the border from Colombia wearing a fake mustache and using a false ID.

Elements of discontent among the security forces began to appear a year ago when Oscar Pérez, a police officer and pilot, commandeered a helicopter and lobbed grenades at government ministries. Maduro blamed the attack on Major General Miguel Rodríguez Torres, a former intelligence chief who broke with the government in 2015. Pérez was later killed in a raid. By January, arrests of special forces lieutenants began. In March, Rodríguez Torres and some armored battalion commanders were arrested for attempted insurrection. He remains in prison.

The biggest set of arrests took place around the time of Maduro’s reelection. Participants and their lawyers say the authorities picked up a Colombian civilian, the physician boyfriend of the only woman who participated in the coup attempt. They say he’s been tortured, though he knew nothing of the plot.

Maduro has carefully cultivated his relationship with the military. Last year, when more than a million people joined antigovernment protests, he relied on his security forces to quash the unrest. Since Chávez’s death in 2013, Maduro has handed over large parts of the economy to the military, including top jobs at the state oil producer and control over food distribution. He’s promoted hundreds of generals and admirals, and active and retired military officials hold nine of 34 cabinet posts.

Nonetheless, a person with knowledge of the military says polls run by the intelligence service found Machado has especially high approval ratings among officers. That may explain why the government has tried to link her to the plot. Rocío San Miguel, president of watchdog group Control Ciudadano, says Maduro also maintains control through fear, regularly detaining or purging other officers and soldiers.

“I don’t believe this idea that Maduro is holding on by a thread,” San Miguel says. “Maduro has developed a state policy of persecution and monitoring within the armed forces. He’s paranoid. The government is creating a firewall.”

BOTTOM LINE – A military coup to topple Venezuelan President Maduro—the most serious threat he’s faced in his five years in office—was quashed when dozens of plotters were arrested.

Russian Interests in Venezuela: A New Cold War?

From Americas Quarterly

From arms factories to Rosneft’s investments, Vladimir Putin’s actions in Venezuela reveal his desire to create turbulence close to the U.S.

When I wrote an essay for Americas Quarterly in the winter of 2015 asking, “What’s Vladimir Putin’s interest in the Western Hemisphere?” I concluded that Russian investments were “commercially driven with lesser geopolitical purposes.” I was wrong.

As far as Venezuela is concerned, Russian interests have grown with the intent to disrupt western democracies and achieve a firm foothold in the Western Hemisphere’s largest oil reserve. Russia has helped keep President Nicolás Maduro in power despite a humanitarian tragedy that has been compounded by a crisis in governance: corrupt and incompetent leadership, absence of the rule of law, compromised judges, and the detention of hundreds of political prisoners.

The Kremlin’s financial interest in Venezuela began to deepen in late 2013, when Igor Sechin, the CEO of Russia’s state oil company Rosneft, announced plans to acquire Lukoil’s assets in Junin 6, a lucrative oil block in the Orinoco Belt, and invest $13 billion in Venezuelan oil and gas assets over the following 5 years. In early 2016, Rosneft announced a further investment of $500 million in Petro Monagas, in the Orinoco Basin, and became a partner with Venezuela’s state-run oil company PDVSA for offshore gas drilling. That same year, Rosneft acquired a 49.9 percent interest in the Venezuelan oil distribution company Citgo for a further $1.5 billion, although U.S. pressure led it to swap its interests for oilfield stakes and a fuel supply deal.

In short, Vladimir Putin, through Sechin and Rosneft, has kept Maduro and PDVSA afloat with loans, guaranteed by oil and gas shipments. When it was unable to pay Rosneft’s credit lines, PDVSA sought and obtained a bond restructure. Maduro’s lifeline to pay government workers and the military is in fact the Russian government. Opposition legislators in Venezuela claim that Russia is behaving more like a predator than an ally.

There are other examples: A 2006 project to construct the largest Kalashnikov factory outside Eastern Europe for the annual production of 25,000 AK-103 assault rifles and 50 million rounds of ammunition stalled, but re-emerged in April this year, when the Russian and Venezuelan defense ministers announced that production would begin in 2019. Financing for this project remains murky.

So what is Moscow up to?

Recently, a gathering of Russian and Venezuelan scholars at the Woodrow Wilson Center in Washington analyzed the security purposes of Russia’s interests in Venezuela today.[i] According to panelist Vladimir Rouvinski of the Center for Inter-Disciplinary Studies at Icesi University in Colombia, Russia will continue to meddle in Venezuela so long as the U.S. and European governments interfere in Ukraine; both are viewed as each other’s near abroad. To a Russian public seeking to reassert their country’s global status, Putin can demonstrate the capability to retaliate for western action in Ukraine. He also sees Russian interests in Venezuela as fostering a multi-party world with a network of friendly nations, including the late Hugo Chávez’s Bolivarian alliance, known by the acronym ALBA, that leans leftward and is more independent from the U.S.

However, Putin prefers to hide Russia’s direct hand and therefore encourages Sechin, his close ally, to carry out Russian interests. Sechin is known as “Darth Vader,” and is widely considered the second most powerful man in Russia after Putin. He dispenses with competitors through court convictions and settles comfortably into Rosneft’s Bombardier aircraft to escape cruel Russian winters in the Caribbean and Latin America. Speaking good Spanish and Portuguese, he has constructed a network of allies in the Western Hemisphere with whom he can conduct Russian government business.

So close to the US…

Why is Venezuela so attractive to Sechin and the Russian government?

First, Venezuela’s key value is its proximity to the United States. With its vast resources of oil and gas, Venezuela presents an opportunity to invest and to disrupt. Russian citizens are nostalgic for Soviet times, eager to see Russia play on the world stage and bring down the U.S. a peg or two. Sechin and Russia can play in Venezuela at a minimum cost. The Caribbean nation is sufficiently far from Russia that citizens need not delve into the details of Venezuela’s economic and social chaos. Furthermore, it allows Russia to resume a collaborative project with Cuba, an island from which it withdrew in the early 1990s upon the collapse of the Soviet Union. The old Soviet/Cuban mutual trust has not been restored, but working together on regional projects might build confidence in the relationship and reinvigorate Russian desire for warm-water projects. With the recent decline of Venezuelan oil exports to Cuba by more than one half, Russia resumed delivery of oil and diesel to the island in May 2017, something unseen since the Cold War. Likewise in Nicaragua, Venezuelan oil supplies have dropped significantly, impacting the Nicaraguan budget and requiring austerity plans that have been resisted fiercely in the streets of Managua. If not a return on capital, Russia has found a return on public relations and the resumption of friendship ties with nations fronting the Caribbean.

Second, while oil prices were high, there existed plentiful opportunity for military-to-military collaboration. In 2008, under Chávez, Russia extended Venezuela a $1 billion loan for arms production and the following year offered a further $2 billion for arms purchases. No formal ties or permanent presence was established, but private arms sales could thrive. Venezuelan pilots and army colonels trained in Russia, and Russian arms salesmen, found opportunities. Still, the 2006 Kalashnikov project went nowhere until April 2018, when defense ministers made their announcement of a production start date in late 2019. (It is debatable whether Venezuela can implement this project.) In 2011, the extension of loans with which to manufacture or buy weapons was tied to demands for access to rich oil and gas blocs in the Orinoco Belt. Facing the reality of Venezuelan incapacity to carry out promised projects, Russian arms manufacturing and sales shifted to the acquisition of stakes in lucrative oil and gas fields.

A third factor has influenced the strengthening relationship: Both Russia and Venezuela face sanctions from the United States and European states. Both are restricted from accessing the U.S. bond market, traveling to the U.S. and buying much needed spare parts. Both seek alternative markets. A common sense of resentment has led to closer collaboration.

Not a great investment

Nevertheless, Russian investments in Venezuela have produced heavier costs than expected. Mismanagement, corruption and incompetence in both the government and PDVSA have resulted in employees not showing up for work, no spare parts to repair essential machinery and a serious fall in oil production from 3.5 million barrels a day (bpd) to 1.43 million bpd. In just one month this year, from March to April, production fell by 41.7 bpd.[ii] Payments on principal and interest for loans estimated at $120 billion have yet to be paid in full. In May 2018 the Inter-American Development Bank halted any new loans to Venezuela after the government fell behind on servicing $2 billion in debt. The Second District Court in New York decided in favor of the holders of promissory notes, and the U.S. Treasury Department reviewed Rosneft’s stake in Citgo. Swiftly, Rosneft swapped its Citgo collateral – given for a 2016 loan of $1.5 billion – for more tangible benefits in other PDVSA ventures. These include stakes in two offshore natural gas fields holding reserves of 14 trillion cubic feet.

While the Chinese government has publicly demonstrated its annoyance at Venezuelan mismanagement and suspended its concessionary repayment schedule, the Russian Finance Minister agreed in November 2017 to restructure approximately $3 billion in Kremlin loans. Thanks to the restructuring, Venezuela is now able to pay off its government debt over 10 years, thus freeing up cash for Maduro to pay his armed forces, continue the Kalashnikov project and purchase much needed food and medicines. Russian ministers led the negotiations to restructure the Kremlin loans.

Igor Sechin’s role in Venezuela remains a mystery. His reputation for business acumen was sealed when he took over Rosneft in 2012 and turned the majority state-owned company from the sick man of Russian energy to its undisputed leader. Today, Rosneft accounts for 6 percent of the world’s crude output, valued at approximately $65 billion, with $53 billion transferred to the Russian state in 2016. Sechin, who owns 0.127 percent of Rosneft shares and is worth approximately $83 million, is reputed to be a ruthless micro-manager, intolerant of failure. So why does he tolerate the mismanagement of PDVSA? Does he see this Venezuelan partnership as a longer-term commercial enterprise or as a geopolitical extension of the Kremlin’s foreign policy?

To date, and despite the incompetence, Sechin has extended a $6 billion lifeline to PDVSA. He has acquired valuable blocs of oil and gas in the richest seams of the Orinoco Belt and swapped his stake in Citgo for the right to commercialize Rosneft’s share of oil output from all joint ventures. Despite being the junior partner, Sechin has negotiated PDVSA’s permit to export Rosneft’s shares of its entire production in Venezuela. (This latest agreement counters the previous requirement that junior partners, Rosneft included, sell their output from joint projects to PDVSA.) In a desperate need to roll over foreign debt, Maduro has acceded to Sechin’s demands.

Implications for Russian power

Back home, Sechin is the epitome of a Russian oligarch. In 2003, he sought to undermine Mikhail Khodorokovsky, the owner of Yukos, and took over the now-defunct oil and gas firm’s assets when Khodorokovsky was convicted of tax evasion. In 2014, Sechin allegedly asked prosecutors to bring charges against Vladimir Yevtushenkov, the owner of Bashneft, another oil company. When Yevtushenkov was convicted and Bashneft nationalized, Rosneft purchased the company from the state. In 2017, Sechin accused then-Economy Minister Alexei Ulyukaev of soliciting a bribe. In the ensuing court case, Ulyukaev was convicted and sentenced to 8 years in jail. Sechin is ruthless in pursuing his goals.

Rumors abound in Moscow as to whether Putin believes Sechin went too far in bringing down Ulyukaev. Does Putin still need Sechin? Yes. Does Putin support Sechin’s unannounced ambition to become his heir in the 2024 presidential elections? No one knows.

One way to find out is to watch how Sechin manages the Venezuela portfolio. If he can produce a positive return on Rosneft’s investments in Venezuela, then his negotiating style may end up winning him a place on the ballot. If he fails to produce a commercial return, then Rosneft’s loss may be Sechin’s undoing. Russians toy with Venezuela’s crisis, knowing that they irritate Washington, hold valuable rights in long-term oil and gas reserves, and show solidarity among victims of U.S. sanctions. Whether these geopolitical plays outweigh heavy commercial losses is yet to be seen. If Sechin fails to bring in sufficient economic returns, Putin may have found the justification to deprive him of the heir’s footstool. He need never show his hand; Maduro’s mismanagement will have done it for him.

Author Villiers Negroponte is a public policy scholar at the Woodrow Wilson Center

From EIA

Venezuela Country Overview – Holder of the World’s Largest Oil Reserves

– Updated June 21, 2018 –

Venezuela holds the largest oil reserves in the world, in large part because of the heavy oil reserves in the Orinoco Oil Basin. In addition to oil reserves, Venezuela has sizeable natural gas reserves, although the development of natural gas lags significantly behind that of oil. However, in the wake of political and economic instability in the country, crude oil production has dramatically decreased, reaching a multi-decades low in mid-2018.

Venezuela, a founding member of the Organization of the Petroleum Exporting Countries (OPEC), is an important participant in the global oil market. It ranked among the top 15 producers of oil and liquid fuels in 2017, but its output has fallen significantly since global crude oil prices fell from their peak in mid-2014. The production declines have been especially acute since mid-2016, with Venezuela’s crude oil output falling by 755,000 barrels per day (b/d) between June 2016 and May 2018.

In 2016, Venezuela consumed 74.6 million tons of oil equivalent, a 5% decline in total energy consumption compared with the previous year. [1] Natural gas and oil accounted for the largest share of the country’s total energy consumed (81% of total), with hydroelectric power meeting about 19% of total demand.

Although Venezuela’s oil output has been steadily declining since it peaked in the late 1990s, Venezuela has been among the top exporters of crude oil to the United States. However as Venezuela’s crude oil production decreased, so did U.S. imports of Venezuelan crude oil. As of the first quarter of 2018, EIA data show that U.S. imports from Venezuela reached their lowest levels since January 1993.

The Venezuelan economy relies heavily on crude oil, and the decrease in oil revenues in recent years has resulted in a severely challenging financial situation. Venezuela’s crude oil revenues have fallen significantly, falling to $22 billion in 2016, according to EIA’s estimates of Venezuela’s net oil export revenues. In 2011, Venezuela’s net oil export revenues were more than $73 billion (in 2016 dollars). Venezuela’s economy contracted by nearly 9% in 2017, based on estimates from Oxford Economics. The economic situation is increasingly precarious, and directly affects the energy sector.

Venezuela’s economic and political instability

Venezuela’s crude oil production has been in rapid decline — average crude oil output has fallen to a 30-year low (excluding the decline in production during the 2002 – 03 strike). As of May 2018, Venezuela’s crude oil production was 1.4 million barrels per day (b/d). According to tanker tracking data, Venezuela exported an average of 1.5 million b/d of crude oil in 2017, 10% lower than the 2016 level. In the first quarter of 2018, exports of Venezuela’s crude oil fell to 1.1 million b/d, based on tanker loadings data.

In addition to falling production and exports, refiners in the United States and Asia have reported crude oil quality issues with crude oil imported from Venezuela, resulting in requests for discounts or discontinuation of purchases.

Venezuela’s crude oil exports to the United States fell from 840,000 b/d in December 2015 to roughly 480,000 b/d in March 2018. Venezuela was the third-largest supplier of crude oil imports into the United States after Canada and Saudi Arabia, occupying a top-three spot from 2015 to 2017. In March 2018, Venezuela was the fifth largest supplier of crude oil imports into the United States.

The Venezuela’s oil industry’s chronic problems that led to the steep production declines are unlikely to change any time soon. The industry has been mismanaged since the late 1990s. A somewhat recent anti-corruption campaign has resulted in the firing and jailing of dozens of officials and technical staff at the Petroleos de Venezuela S.A. (PdVSA), the country’s state-run oil and natural gas company, since last year. This has caused a near-complete paralysis at the company. [2]

The Venezuelan government is also facing with high levels of debt and hyperinflation. During the last quarter of 2017, Venezuela was late in making some bond payments, and the main rating agencies declared the country in selective default. During 2018, more than $9 billion in bond payments will come due, raising the possibility of a general default. In addition to the approximately $64 billion of debt in traded bonds, Venezuela owes $26 billion to creditors and $24 billion in commercial loans, according to Torino Capital estimates, although some estimates place Venezuelan debt at $150 billion. [3]

Venezuela’s economy contracted by nearly 9% in 2017, based on estimates from Oxford Economics. While the Venezuelan government has not published any economic data in more than two years, Venezuela’s National Assembly reported in mid-March 2018 that inflation was over 6,000% between February 2017 and February 2018. The International Monetary Fund projects that inflation will soar to 13,000% in 2018 and expects that Venezuela’s economy will contract 15%, resulting in a cumulative gross domestic product (GDP) decline of nearly 50% from 2013 to 2018.

The reduced capital expenditures by PdVSA are resulting in foreign partners continuing to reduce activities in the oil sector and crude oil production losses are increasingly widespread. With Venezuela’s heavy dependency on the oil industry, it is likely that Venezuela’s economy will continue to shrink, and that the runaway inflation will remain the mainstay at least in the short-term.

The non-payment to oil service companies has resulted in the scaling back of operations, which has profoundly affected Venezuela’s crude oil output, especially since mid-2016. Because PdVSA relies on international oil service companies to maintain and operate its oil and natural gas wells, reduced investment and involvement by these companies has led to precipitous declines in production, which has dropped to multi-decade lows. The number of active rigs fell from near 70 in the first quarter of 2016 to 35 rigs in April 2018. Reports indicate that missed payments to oil service companies, a lack of working upgraders, a lack of knowledgeable and able managers and workers, and declines in oil industry capital expenditures will continue to affect crude oil production negatively. [4]

Additionally, Venezuela’s revenue from oil exports is severely constricted as only about half of the exports generate cash revenues. U.S. refiners are among the few customers that still remit cash payments. The remaining crude oil exports are sold domestically at a loss or sent as loan repayments to China and Russia (the repayments to Russia are sent to Nayara Energy’s (formerly Essar) Vadinar refinery in India to service debt that Venezuela owes to Russian oil company Rosneft, the co-owner of the Vadinar refinery).

Venezuela’s midstream, downstream, and export facilities are also experiencing difficulties. In a recent legal setback for PdVSA, ConocoPhillips successfully seized PdVSA Caribbean assets following a $2 billion award the company received in April 2018 as compensation for the seizure of its assets in Venezuela. PdVSA depends on its Caribbean assets to export extra-heavy crude oil to Asia. This latest action will severely hamper Venezuela’s ability to prevent production from declining further.

Venezuela has also been experiencing increasing power blackouts and electricity rationing, additionally exacerbating events.

Petroleum and other liquids

Venezuela has the world’s largest proved oil reserves, but production of oil and other liquids has been steadily decreasing. Most recent production data indicate that crude oil output has reached a multi-decade low as oil sector mismanagement and economic problems affect the industry.

In January 2018, Venezuela had 302 billion barrels of proved oil reserves, the largest in the world, followed by Saudi Arabia and Canada. Most of Venezuela’s proved oil reserves are heavy crude oil deposits located in its Orinoco Oil Belt (OOB) in central Venezuela, making Venezuela’s crude oil somewhat expensive to produce, but relatively technically simple.

According to a study released by the U.S. Geological Survey, the mean estimate of recoverable oil resources from the OOB is 513 billion barrels of crude oil. [5] Spread over 19,000 square miles, the belt is divided into 36 blocks within 4 exploration areas: Boyaca, Junin, Ayachucho, and Carabobo. Venezuela allows foreign firms to invest, but the country requires PdVSA to hold at least 60% equity in joint ventures. Major joint venture partners include Chevron, China National Petroleum Corporation, ENI, Statoil, Total, and Rosneft.

In addition to the Orinoco Oil Belt area, Venezuela also has reserves in and around Lake Maracaibo in the western part of the country.

Sector organization

Venezuela nationalized its oil industry in the 1970s, creating Petroleos de Venezuela S.A. (PdVSA), the country’s state-run oil and natural gas company. In addition to being Venezuela’s largest employer, PdVSA accounts for a significant share of the country’s gross domestic product (GDP), government revenue, and export earnings. During the 1990s, Venezuela took steps to liberalize the petroleum sector. However, since the election of Hugo Chavez in 1999, Venezuela has increased public participation in the oil industry. The Chavez government initially raised tax and royalty rates on new and existing projects and mandated majority PdVSA ownership of all oil projects.

In 2002, conflicts between PdVSA’s employees and the government led to a strike in protest against the rule of then-President Chavez, largely bringing the company’s operations to a halt. In the wake of the strike, PdVSA overhauled the internal organization to solidify government control. The government laid off thousands of PdVSA workers who had participated in the strike, resulting in a massive loss of expertise at the company, which especially affected PdVSA’s technical capabilities. As a result, crude oil production in Venezuela never recovered to pre-2002 levels, declining nearly every year since then. In 2006, Chavez implemented the nationalization of oil exploration and production in Venezuela, mandating joint ventures with PdVSA with a renegotiation of a 60% minimum PdVSA share in projects.

A number of these joint ventures (JVs) currently operate in Venezuela, including JVs with U.S. companies, and a number of Chinese and Russian operators. In addition to the oil companies involved in the JVs, international oil service companies such as Halliburton, Schlumberger, Weatherford, and Baker-Hughes have made significant investments in Venezuela. However, as Venezuela’s economy has worsened, these oil service companies have not been paid for oil field services rendered to PdVSA, which has accumulated very large arrears over the past few years. PdVSA now owes more than $1 billion, including some of the companies’ write-offs of arrears and accounts receivable.

Exploration and production

At 2.2 million barrels per day (b/d) of petroleum and other liquids produced in 2017, Venezuela was the 12th largest global producer. However, crude oil and other liquids production is continuing to fall amid Venezuela’s economic woes, with declines widespread among PdVSA and joint venture projects.

The U.S. Energy Information Administration (EIA) estimates that Venezuela produced 2.2 million b/d of petroleum and other liquids in 2017. Crude oil and condensates represented 2 million b/d of the total, with natural gas liquids and refinery processing gains accounting for the remaining production. This production level marks a significant decrease from production peaks in the late 1990s to early 2000s. The production decreases experienced by the sector following the 2002—03 strike largely resulted because of technical expertise losses and the diversion of revenues to social programs rather than to reinvestment in petroleum production. More recent and more accelerated declines, however, have resulted from the breakdown in the economy, largely non-existent capital expenditures in the sector, and overall mismanagement of the industry. Despite its production declines, Venezuela was still the 12th largest producer of petroleum in the world in 2017.

Venezuela’s conventional crude oil is heavy and sour by international standards. As a result, much of Venezuela’s oil production must go to specialized domestic and international refineries. The country’s most prolific production area is the OOB, which accounted for more than half of Venezuela’s oil production in 2017. Production of heavy oil from the OOB had been increasing until 2016 and had accounted for an increasing share of total output. Production areas in the west, once a prolific source of oil, are home to many of Venezuela’s mature fields, which have seen declines in production as PdVSA’s strategy has focused on developing the heavy oil projects rather than the traditional western Maracaibo-Falcon Basin area. As a result of this pivot towards the OOB, production of medium and light oil has seen a decline in output in the past decade.

Venezuela had become increasingly reliant on its JV partners to produce its crude oil. In 2017, about half of Venezuela’s crude oil production originated in JV projects, and the proportion of JV produced oil had been rising since at least 2010. By comparison, JVs accounted for about 30% of total production in Venezuela in 2010. However, since 2017 this share has fallen significantly.

Joint venture name Estimated production in
2017 (‘000 b/d)
Participating companies and their shares (%)
Petrolera Bielovenezolana 12.6 PdVSA (60), Belorusneft (40)
Petrozumano 2.4 PdVSA (60), CNPC (40)
Venangocupet 5.7 PdVSA (60), Cupet (20), Sonangol (20)
Petropiar 146.6 PdVSA (70), Chevron (30)
Petromonagas 114.1 PdVSA (60), Rosneft (40)
Petrolera Sinovensa 128.7 PdVSA (60), CNPC (40)
Petrocedeno 101.4 PdVSA (60), Total (30.3), Statoil (9.7)
Petrozamora 102.2 PdVSA (60), Gazprombank (40)
Petroboscan 86.2 PdVSA (60), Chevron (39.2), Inepetrol (0.8)
Petroquiriquire 32.5 PdVSA (60), Repsol (40)
Petroindependencia 38.1 PdVSA (60), Chevron (34), INPEX and Mitsubishi
(5), Suelpetrol (1)
Petrosucre 23.9 PdVSA (74), Eni (26)
Petroregional del Lago 22.2 PdVSA (60), Shell (40)
Petrocarabobo 24.7 PdVSA (71), Repsol (11), ONGC Videsh (11), Indian
Oil (7)
Petrolera Indovenezolana 17 PdVSA (60), ONGC Videsh (40)
Petromiranda 14.2 PdVSA (60), Rosneft (40)
Petrojunin 14.3 PdVSA (60), Eni (40)
Petroritupano 4.3 PdVSA (60), Pampa (22), Anadarko (18)
Petrowarao 2.1 PdVSA (60), Perenco (40)
Baripetrol 0.5 PdVSA (60), Perenco (17.5) PFC (5), Suizum (17.5)
Petromacareo 0 PdVSA (60), PetroVietnam (40)*
PetroCabimas 17 PdVSA (60), Suelopetrol (40)
Petrodelta 26.6 PdVSA (60), DP Delta Finance BV (40)
Petrolera Kaki 0.4 PdVSA (60), Inemaca (22.67), Inversiones Polar
Petrocuragua 0.3 PdVSA (60), OPEN (12), CIP (28)
Petrocumarebo 0 PdVSA (60), PFC (40)
Petrolera Paria 0 PdVSA (60), Sinopec (32), INE Oil (8)
Petrolera Guiria 0 PdVSA (64.25), ENI (19.5), INE Oil (19.5)
PetroUrica 0.3 PdVSA (60), CNPC (40)
PetroVictoria 0 PdVSA (60), Rosneft (40)
Lagopetrol 1.3 PdVSA (69), Integra (26.35), Ehcopek (3.1), CIP
Petroboqueron 3.2 PdVSA (60), Rosneft (26.67), PEI (13.33)
Petrolera Sinovenzolana 0.8 PdVSA (75), CNPC (25)
Petrowayu 0.7 PdVSA (60), Pampa (36), Anadarko (4)
Petrourdaneta 1.7 PdVSA (60), Odebrecht (40)
Petroindependiente 2.1 PdVSA (74.8), Chevron (25.2)
Petroguarico 0.6 PdVSA (70), INPEX (30)
Petronado 0.5 PdVSA (60), Compania de Combustibles (26),
Petroamazonas (8.4), Korea National Oil
Corporation (5.6)
Petroperija 7.1 PdVSA (60), Rosneft (40)
Petrokarina 0.4 PdVSA (60), Pampa (29.2), Inversora Mata (10.8)
Petroven-Bras 0 PdVSA (60), Pampa (29.2), Coroil (10.8)
Sources: U.S. Energy Information Administration, based on information reported by PdVSA’s JV partners, IPD Latin America, Energy Intelligence, NewsBase Latin America Oil&Gas Monitor, BN Americas, and Rystad Energy
Table 1. Venezuela’s oil joint venture projects with foreign partners


Venezuela was the fourth-largest supplier of imported crude oil and petroleum products to the United States in 2017. However, in the first quarter of 2018, Venezuela’s exports to the United States have fallen to the lowest level since the 2002—03 strike.

The United States is the primary destination for Venezuelan crude oil shipments and receives about 41% of Venezuela’s total exports. The other significant destinations of Venezuelan crude oil exports are Asia, the Caribbean nations, and, to a lesser extent, Europe. The second- and third-largest destinations and the fastest-growing destinations of Venezuelan crude oil exports have been India and China. EIA estimates that Venezuela sent more than 386,000 b/d of crude oil to China and 332,000 b/d of crude oil to India in 2017.

In the past, Venezuela provided sizable volumes of crude oil and refined products to its regional neighbors under the Petrocaribe initiative established in 2005. A number of countries in the Caribbean and in Central America are members of Petrocaribe, including Antigua and Barbuda, Bahamas, BelizeCubaDominicaGrenadaGuatemala, Guyana, HaitiHondurasJamaicaNicaragua, Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, and Suriname. Under the Petrocaribe initiative, Venzuela offers favorable financing and long repayment terms that often feature barter arrangements instead of cash transactions. These favorable terms included deferred payments amortized over 25 years at low interest rates (as low as 1%). [6] In mid-June 2018, PdVSA announced that it is indefinitely suspending fuel exports to Antigua and Barbuda, Belize, Dominica, El Salvador, Haiti, Nicaragua, St. Vincent and the Grenadines, and St. Kitts and Nevis. The eight nations accounted for about 38,000 b/d of Petrocaribe volumes. Exports to Cuba will reportedly continue. [7]

EIA estimates that the United States imported an average of 618,000 b/d of Venezuelan crude oil in 2017, falling by nearly 17% compared with the previous year. At its peak, U.S. imports of Venezuelan crude oil averaged 1.1 million b/d in 2007. Venezuela was the third-largest supplier to the United States in 2017, but as of February 2018, Venezuela fell behind Canada, Saudi Arabia, MexicoIraq, and Colombia based on average imported volumes of crude oil during the month, when U.S. imports from Venezuela averaged 409,000 b/d.

In addition to crude oil, the United States imported about 55,000 b/d of refined products from Venezuela in 2017, and this volume of imports has remained relatively steady since 2013. U.S. imports of petroleum products in 2017 from Venezuela primarily consisted of motor gasoline blending components (18,000 b/d), kerosene-type jet fuel (15,000 b/d), and residual fuel oil (14,000 b/d). Before 2012, the United States imported Venezuelan petroleum products via the U.S. Virgin Islands. However, since the U.S. Virgin Island’s Hovensa refinery was shut down in 2012, the U.S. Virgin Islands no longer exports refined Venezuelan petroleum.

U.S. exports of petroleum products to Venezuela have increased largely because of lack of funds needed to maintain domestic refineries. U.S. exports of petroleum products. Venezuela peaked in 2012 at 85,000 b/d. In 2017, the United States exported 77,000 b/d of petroleum products to Venezuela, which relies heavily on imports of U.S. petroleum products, particularly unfinished oils and gasoline. More than 45% of its U.S. petroleum exports to Venezuela was unfinished oils, which are blended with heavy crude oils for processing. Before 2012, Venezuela imported primarily methyl tertiary butyl ether (MTBE), intended for blending in gasoline, motor gasoline, and distillate fuel oil, but the country has since begun to import increasing volumes of finished motor gasoline and distillate because its domestic refining system increasingly does not meet domestic demand.

Venezuela’s crude oil grades and export facilities

Venezuela produces eight different grades of crude oil, but most grades can be classified as the heavy, sour variety. These crude streams include:

Merey-16 is a heavy, high-sulfur (sour) (15.9° API, 2.7% sulfur) blended crude oil that requires coking units and complex refineries to be processed, making it an attractive stream for U.S. and some Chinese refiners. Merey-16 is one of Venezuela’s largest crude oil streams and is actually a blend of the Mesa-30 grade and extra-heavy crude from the OOB, including from the Sinovensa JV and several other eastern Venezuelan heavy oil fields. [8]

Boscan is a heavy sour crude oil (10.7° API, 5.2% sulfur) that is produced from the Boscan oil field in the western state of Zulia. This grade is loaded from the Bajo Grande terminal. Some Boscan volumes are shipped to China as loan repayments, and the remainder is sold under flexible term contracts. [9]

Mesa-30 crude oil stream is produced from PdVSA’s El Furrial complex in Monagas state. Crude oil from the field is sold as a distinct stream—Mesa-30—and is blended with extra-heavy OOB crude to form the Merey-16 stream. Mesa-30 is a medium, sweet crude grade (29.1° API, 1.08% sulfur) and it was exported mainly to the United States in 2017. [10]

The Santa Barbara stream, which is exported from the Bonaire terminal, is a light, sweet crude oil (39.3° API, 0.48% sulfur) that is mainly sources from the Santa Barbara field (Monagas state), although a number of other, smaller fields also contribute volumes. Most of the Santa Barbara stream is consumed domestically. [11]

Hamaca Blend is a medium-heavy, sour synthetic crude oil stream (26.0° API, 1.55% sulfur) sourced from the extra-heavy Hamaca (or Ayacucho) field located in the OOB and then upgraded at the Jose upgrading and terminal complex. The Hamaca project is operated by the PdVSA and Chevron JV, Petropiar, and it upgrades extra-heavy 8.5° API crude into lighter, synthetic 26° API crude. Most of the Hamaca volumes were exported in 2017.

Monagas-18 (18.0° API, 3.34% sulfur) blend is also a synthetic crude produced in the OOB and then upgraded at the Petromonagas facility in the Jose Industrial Complex. Venezuela’s other synthetic crude streams are Petrozuata (19°-25° API, 2.9% sulfur), which is upgraded at the Petro San Felix upgrader, along with the Zuata Sweet blend (30°-32° API, 0.13% sulfur), produced in the OOB and upgraded at PetroCedeno’s facilities. [12]

In 2017, Venezuela exported crude oil from nine loading points—six are located in Venezuela and three others are located in the Caribbean in Curacao, Bonaire, and St. Eustatius. Venezuela’s largest terminal by barrels loaded is the Jose Terminal, located offshore of the Jose industrial complex in the northeast of Venezuela. In 2017, about 73% of all crude oil loadings in Venezuela occurred at the Jose Terminal, which consists of two berths that can handle 300,000 deadweight tons at an average of 55,000 barrels per hour. [13] Other loading terminals in Venezuela include the Puerto de la Cruz, Bajo Grande Terminal, Puerto Miranda, and Amuay Bay Terminal.

Outside of Venezuela, PdVSA exported about 10% of its total loadings from the Bullen Bay Port in Curacao, also home to the Isla refinery. In addition to crude oil, PdVSA exports refined products from the island. The loading terminal in St. Eustatius is operated by NuStar Energy, and PdVSA rents storage tanks for exporting crude oil. In 2017, about 4% of Venezuela’s crude oil was exported from this terminal. Bonaire accounted for another 3% of Venezuelan crude oil exports. PdVSA owns this 10 million barrel BOPEC terminal. PdVSA and Citgo lease a refinery and a storage terminal in Aruba, but crude oil is not exported from that island.

The recent seizure of PdVSA’s Caribbean export and storage facilities that support PdVSA’s exports by ConocoPhillips will hamper Venezuela’s ability to maintain the current level of exports because the country relies on these terminals to send crude oil to Asia.

Loading point Percentage of total
loadings during
Jose Terminal 73%
Curacao Terminal 10%
Puerto De La Cruz 5%
St. Eustatius Terminal 4%
Bonaire Terminal 3%
Puerto Miranda Terminal 3%
Bajo Grande Terminal 1%
Nabarima FPSO 1%
Amuay Bay Terminal 1%
Sources: U.S. Energy Information Administration, based on information published by Clipper Data, Inc tanker tracking database
Table 2. PdVSA’s crude oil loading terminals and percentages shares of total exports, 2017


In 2017, Venezuela had about 2.7 million b/d of total nameplate refining capacity assets throughout the United States, the Caribbean, Europe, and in Venezuela. However, actual operating capacity is significantly lower—estimated at about 1.8 million b/d—as a result of the disrepair at PdVSA’s refineries in Venezuela, which have operated at rates as low as 20% in 2017 and in early 2018.

Venezuela had 1.3 million b/d of domestic nameplate crude oil refining capacity in 2017, which were all operated by PdVSA. [14] However, actual refining capacity in early 2018 was less than half of its nameplate capacity, estimated at 626,000 b/d. Nearly all of the facilities have fallen into disrepair, and some facilities lack feedstock to run at rates higher than 20%-30%. A number of facilities have suffered damage from fires and operational accidents over the past few years, and PdVSA lacks the funds to repair them or invest sufficient capital to keep the facilities operating. Venezuela’s major facilities include the Paraguana Refining Center (nameplate capacity 955,000 b/d), Puerto de la Cruz (nameplate capacity 195,000 b/d), El Palito (nameplate capacity 140,000 b/d), and San Roque (nameplate capacity 5,800 b/d). PdVSA also owns the 16,000 b/d Bajo Grande refinery, but this facility was shut down in August 2016. Additionally, San Roque operates infrequently as a result of lack of crude oil feedstock.

Nameplate Capacity Operating Capacity PdVSA’s share of nameplate capacity
Venezuela 1,303,800 625,800 1,303,800
United States 749,000 749,000 749,000
Caribbean 640,000 305,000 604,000
Europe 84,000 84,000 38,000
Total 2,776,800 1,763,800 2,694,800
Source: Oil and Gas Journal, PdVSA, IPD Latin America, trade press
Table 3. PdVSA’s refinery capacity by region, 2018, barrels per day

PdVSA also operates significant refining capacity outside the country. The largest share of Venezuela’s foreign downstream operations is in the United States, followed by significant operations in the Caribbean and stakes in Europe. CITGO, a wholly-owned subsidiary of PDVSA, operates three refineries (Lake Charles, Louisiana; Corpus Christi, Texas; and Lemont, Illinois), with a combined crude oil distillation capacity of about 758,000 b/d. PdVSA used to own a 50% stake in the Louisiana Chalmette refinery, but in 2015 ExxonMobil and PdVSA reached an agreement with PBF Energy for the sale of the refinery. Similarly, the Sweeney, Texas, refinery is no longer part of PdVSA’s refining portfolio since September 2015, when federal court in New York ruled that ConocoPhillips is the sole owner of the facility in. The court case and ruling was the result of a contractual dispute between PdVSA and ConocoPhillips.

In May 2018, ConocoPhillips also targeted PdVSA’s Caribbean assets in an effort to enforce the $2 billion arbitration award given to the company as compensation for Venezuela’s nationalizations of its oil projects. ConocoPhillips reportedly is looking at PdVSA assets on Curacao, Bonaire, and St. Eustatius and has seized storage tanks and operations on the islands. As a result, Venezuela is unable to use the crucial Curacao terminal for crude oil exports to Asia, further deepening the country’s problems in producing and exporting crude oil.

PdVSA, through its subsidiary PDV Europe B.V., also owns a 50% stake of Nynas AB and its refineries across Europe. PdVSA also owns a 25% stake in the Eastham, UK refinery, which is a joint venture with Shell.

In the Caribbean, PdVSA owns about 600,000 b/d of nominal refining capacity, including facilities in Curacao, Aruba, Jamaica, and the Dominican Republic, although, operational capacity is much lower. For example, the Isla refinery in Curacao has a nameplate capacity of 335,000 b/d, but its operating capacity in the first quarters of 2018 was lower than 100,000 b/d because one of the refineries’ distillation units has been out of service. In early April 2018, the refinery was almost completely shut down as PdVSA has been unable to pay for the light crude oil that is processed at the refinery and lacked funds to repair the steam and power issues at the facility.

PdVSA also used to own a 49% stake in Cuba’s Cienfuegos 65,000 b/d refinery but appears to have pulled out of the partnership sometime in 2017. In December 2017, Granma, the Cuban Communist Party’s newspaper, reported that since August 2017, the Cienfuegos refinery had been operating as a fully Cuban state entity. PdVSA has not issued any statements regarding this change.

Natural Gas

Venezuela has the second-largest natural gas reserves in the Americas, behind the United States and is the eighth-largest holder of natural gas reserves in the world. Much of Venezuela’s natural gas is used to increase production in its mature oil fields, and its development of natural gas resources has generally lagged behind that of oil.

Venezuela had 203 trillion cubic feet (Tcf) of proved natural gas reserves in 2017. In 2016, Venezuela produced 3.3 billion cubic feet per day (Bcf/d) of natural gas and consumed 3.4 Bcf/d of natural gas.

IPD Latin America estimated that only about 12% of Venezuela’s natural gas was produced by private companies via nonassociated gas licenses. Nearly all of the remaining natural gas output was production associated with crude oil by PdVSA or its JVs. [15] With its traditional focus on crude oil, Venezuela has not sufficiently incentivized natural gas production domestically. As a result, despite the sizable reserves and relatively minor geological risk, natural gas production has lagged behind domestic consumption for more than a decade.

In 2017, more than 38% of Venezuela’s total natural gas production was reinjected, according to data published by Rystad Energy. [16] The country’s petroleum industry is a major consumer of natural gas production, and the reinjected volumes are primarily used for gas reinjection to increase crude oil extraction. Because of the declining output of mature oil fields, natural gas use for enhanced oil recovery has consistently accounted for more than 40% of total production since at least 2004. The share of reinjected gas peaked at 60% in 2009.

Sector organization

In 1999, Venezuela adopted the Gas Hydrocarbons Law, which was intended to diversify the economy through encouraging nonassociated natural gas development and through expanding the role of natural gas in Venezuela’s energy sector. This legislation allows private operators to own 100% of nonassociated projects, in contrast to the ownership rules in the oil sector. The legislation also requires lower royalty and income tax rates on nonassociated natural gas projects than on oil projects. The law gives PdVSA the right to purchase a 35% stake in any project that moves into commercial status.

PdVSA produces the largest amount of natural gas in Venezuela, and it is also the largest natural gas distributor. In addition, a number of private companies currently operate in Venezuela’s natural gas sector. In 2001, Venezuela awarded nonassociated gas production licenses to Repsol and Total, with additional licenses awarded through 2010 under a cost-recovery scheme that was deemed more attractive to companies. The government compensated companies under a pricing scheme that would allow the companies to recover both the operating and capital expenditures, as well as build in a profit margin. However, this pricing scheme expired in December 2015 and the government had not replaced it.

Since natural gas is currently sold at a regulated price, and often below cost, natural gas production in the country is not economically viable for PdVSA, which purchases natural gas from producers at cost of service and sells it on the domestic market at a government-controlled price.

Given Venezuela’s precarious economic, political, and social situation, natural gas production is unlikely to become a priority for the government.

Exploration and production

About 90% of Venezuela’s natural gas is found associated with oil, but the government has been looking to encourage exploration and production of natural gas from nonassociated fields. However, the deteriorating economic and social situation in Venezuela has slowed down the development of natural gas projects even beyond the extremely slow pace seen before.

An estimated 90% of Venezuela’s natural gas reserves are associated, meaning they are located in the same place as oil reserves. Venezuela’s government has long planned to increase production of nonassociated natural gas, largely through the development of its offshore reserves. These plans have been delayed as a result of lack of capital and foreign investment. To attract foreign investment, Venezuela awarded 18 natural gas exploration and production licenses to private companies, but currently only five of those licensees are operating (including three in which PdVSA Gas serves a minority partner). As of early 2018, these licenses accounted for 860 thousand cubic feet per day (Mcf/d) of natural gas production, according to IPD Latin America. [17]

Joint venture/project name Estimated production in 2017
Particiapting companies and their shares
Bielovenezolana (Zamaca West) unknown Belarusneft (40), PdVSA Gas (60)
Cardon IV (Perla) 490 Eni (50), Repsol (50)
Ypergas (Yucal-Placer) 150 Total (69.5), Repsol (15), Inepetrol (10.2), Otepi (5.3)
Quiriquire Gas 128 Repsol (60), PdVSA Gas (40)
Gas Guarico 80 INPEX (70), PdVSA Gas (30)
Source: U.S. Energy Information Administration, based on information reported by PdVSA and its JV partners, IPD Latin America, NewsBase Latin America Oil&Gas Monitor, BN Americas, and Rystad Energy
Table 4. Venezuela’s natural gas projects with foreign partners

Onshore, PdVSA is working to increase production and capacity at existing sites, including in the Anaco field, the Barrancas field, and Yucal Placer. Offshore, PdVSA has awarded exploration blocks to international oil companies including Total, Statoil, and Chevron, in the Plataforma Deltana, Marsical Sucre, and in the Blanquilla-Tortuga areas off Venezuela’s northeast coast. Offshore exploration has yielded many successful natural gas finds, including Repsol-YPF’s and ENI’s discovery of 6 Tcf-8 Tcf of recoverable natural gas in the Perla field, located in the Cardon IV block in the Gulf of Venezuela—one of the largest natural gas discoveries in the history of the country. In July 2015, operations began at the Perla field project, where output has reached nearly 550 Mcf/d in the first quarter of 2018, according to IPD Latin America. [18]


Before to the onset of the current economic crisis, Venezuela improved its 2,750-mile domestic natural gas pipeline transport network to allow greater domestic movement and use of natural gas with the nearly 190-mile Interconnection Centro Occidente (ICO) system. The ICO connects the eastern and western parts of the country, making natural gas more readily available for domestic consumers and for reinjection into western oil fields. In addition, the 300-mile SinorGas pipeline project will transport natural gas produced offshore to the domestic pipeline network via the states of Sucre and Anzoategui.

The Antonio Ricaurte pipeline, connecting Venezuela with Colombia came online in 2008. The pipeline allowed Colombia to export natural gas to Venezuela, with contracted volumes ranging between 80 million cubic feet per day (MMcf/d) and 150 MMcf/d. Although Venezuela planned to eventually export 140 MMcf/d of natural gas to Colombia, difficulties surrounding the development of its resources required Venezuela to continue to import natural gas from Colombia.


Venezuela depends on hydroelectricity, which accounted for 66% its electricity generation in 2015 for most of its electricity needs. The remaining 34% of generation was generated for by fossil fuels.

In 2016, Venezuela generated more than 115 billion kilowatthours of electricity, a decline of nearly 10% compared with the previous year, according to data published by BP. The fall in electric generation in 2016 was primarily the result of extreme drought conditions during the year and lack of sufficient rainfall. Since 2016, electric generation has continued to decrease, but the most recent declines in generation are the result of technical failures affecting both the hydropower and thermal electric power generation plants. These failures include the government’s inability to repair or maintain facilities that are vital to electric power generation. For example, in February 2018, six states in Venezuela reported power blackouts that lasted as long as 15 hours, affecting large population centers (including the capital city Caracas). Since then, the National Electricity Corporation (CORPOELEC) announced that it is implementing power rationing that affects seven states. [19]

Between 2000 and 2015, available data show Venezuela’s electricity consumption increased by 18%. However, the most recently available data show that between 2013 and 2015, electricity consumption fell by more than 22%, reflecting Venezuela’s economic situation.

Hydroelectricity provides most of Venezuela’s electricity supply. The country’s hydroelectric production facilities are primarily located on the Caroni River in the Guayana region. The 10,200-megawatt Guri hydroelectric power plant on the Caroni is one of the largest hydroelectric dams in the world and provides most of Venezuela’s electric power.

About half of the electricity generation from fossil fuels in Venezuela is from natural gas, and the rest is from fuel oil and diesel. The government increased investment in conventional fossil fuel-fired electric generation capacity to reduce the reliance on hydropower and to increase use of domestic hydrocarbon resources before the onset of the current economic crisis. However, all investment in the electricity sector appears to have stopped.

Sector organization

Large, state-owned companies dominate the electricity sector in Venezuela. The government controls the electric sector through the CORPOELEC, a state-owned holding company created in 2007 to consolidate the power sector. CORPOELEC is responsible for the entire electricity supply chain, controlling all major electricity companies in Venezuela including Electrificacion del Caroni (EDELCA), which supplies more than 70% of the country’s electricity.


Data presented in the text are the most recent available as of June 21, 2018.

Data are EIA estimates unless otherwise noted.


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