Venezuelan exports to the U.S. have declined significantly during the last 10 years
Within the last three months two events in the international oil industry illustrate the diverging paths of two important oil producing countries. One, the United States, has been a net importer for many years, on occasions dangerously dependent on foreign oil. During the last six years this dependency has been decreasing rapidly due to the oil shale and shale gas production boom. Last July 30 an oil tanker loaded a cargo of condensate, or ultra-light oil, the first such export from the United States since the easing of a 40-year-old ban on exports, the result of the 1973 Arab Oil embargo. The tanker, owned by BW Group, docked at the Galveston terminal in Texas and will load just over 400,000 barrels of condensate bound for Asia.
Hours ago the first cargo of Saharan crude bound for Venezuela as part of a new deal between state-owned PDVSA and Algeria's Sonatrach loaded on the tanker Carabobo VLCC and is now sailing to Venezuela. PDVSA is now forced to bring Saharan oil from Algeria to use both as a diluent for its heavy crude production in the Orinoco Belt and as feedstock to restart the shuttered lubricants plant at the Curacao refinery. This is the first regular crude oil imports by PDVSA since the company was created, almost 40 years ago.
One net oil importer, the United States has now become an oil exporter. A net oil exporter for almost a century, Venezuela, has now become an oil importer. Why this has happened is a long story but it can be summarized as follows: while U.S. ingenuity and initiative has allowed the country to increase oil and gas production dramatically, Venezuelan political corruption and ineptitude have generated chaos in the Venezuelan oil company, now highly in debt and with a production decline of some 600,000 barrels per day less than 15 years ago.
Dickens would agree that for the U.S. oil industry it is the best of times, but for the Venezuelan oil industry it is the worst of times.