Venezuela holds the world’s largest proven oil reserves, but challenges like lack of expertise, under-investment, political interference, mismanagement, corruption, and sanctions have hindered their exploitation, a report revealed. The US recently targeted Venezuela by seizing President Nicolas Maduro and his wife, causing short-term turbulence in oil markets. Despite having massive reserves, Venezuela’s oil production remains low at around 1 million barrels per day, significantly less than the US and Saudi Arabia.
The report highlighted that Venezuela’s oil reserves are estimated at 303.8 billion barrels, surpassing Saudi Arabia’s 297.5 billion barrels. However, production has drastically declined over the years, currently at one-third of its previous levels a decade ago. Back in 1970, Venezuela was a major oil producer, but its production has significantly dropped since then.
The report emphasized that any potential increase in Venezuelan oil production would not be immediate, requiring at least 3-6 months to materialize. Global uncertainties may lead to a rise in the risk premium, with possible minor spikes depending on responses from Russia and China. Despite these challenges, companies like ONGC and Oil India are seen as good bets in the upstream sector, while oil marketing companies are expected to maintain profitability with low oil prices.
