Venezuela is expected to raise its crude oil production by less than 200,000 barrels per day (bpd) until the end of 2024 as years of underinvestment and mismanagement will hamper rapid output growth following the effective lifting of most oil sanctions on Venezuela for six months, the U.S. Energy Information Administration (EIA) said on Monday.
Last week, the United States lifted sanctions on Venezuela’s oil industry after the Nicolas Maduro government reached a deal with the opposition that could see elections held next year. The U.S. issued a six-month general license until April 18, 2024, temporarily authorizing transactions involving the oil and gas sector in Venezuela. The license will be renewed only if Venezuela meets its commitments under the so-called electoral roadmap, the U.S. Treasury noted.
The easing of the sanctions could raise U.S. imports of heavy crude from Venezuela as it now allows purchases of crude. Until last week, Chevron was the only Western supermajor with special authorization to operate oil fields and export crude from Venezuela, under a special license issued by the Biden Administration late last year.
Still, Venezuela’s crude oil production, at 735,000 bpd in September 2023, per EIA estimates, is unlikely to jump above 900,000 bpd by the end of 2024, the administration reckons.
The lifting of the sanctions will raise Venezuela’s import of diluent, which is necessary to process Venezuela’s heavy oil, but this would boost production only slightly.
Most of the near-term growth is expected to come from Chevron’s joint ventures, which could raise production to 200,000 bpd by the end of 2024 from 135,000 bpd in 2023, according to the EIA.
Joint ventures operated by Eni, Repsol, and Maurel & Prom could increase production by an additional 50,000 bpd in the near term, according to IPD Latin America cited by the EIA. As a result, Venezuela’s total crude oil production could grow to about 900,000 bpd by the end of 2024.
Further production growth will need more time and investments, the EIA said.