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Half of Venezuela’s Oil Rigs May Shut Down If US Waivers Lapse

Public Policy

A looming U.S. sanctions deadline is threatening to clobber Venezuela’s dwindling oil-rig fleet and hamper energy production in the nation with the world’s largest crude reserves.

Almost half the rigs operating in Venezuela will shut down by Oct. 25 if the Trump administration doesn’t extend a 90-day waiver from its sanctions, according to data compiled from consultancy Caracas Capital Markets. That could further cripple the OPEC member’s production because the structures are needed to drill new wells crucial for even maintaining output, which is already near the lowest level since the 1940s.

A shutdown in the rigs will also put pressure on Nicolas Maduro’s administration, which counts oil revenues as its main lifeline. The U.S. is betting on increased economic pressure to oust the regime and bring fresh elections to the crisis-torn nation, a founding member of the Organization of Petroleum Exporting Countries and Latin America’s biggest crude exporter until recent years.

Venezuela had 23 oil rigs drilling in July, down from 49 just two years ago, data compiled by Baker Hughes show. Ten of those are exposed to U.S. sanctions, according to calculations by Caracas Capital Markets. The Treasury Department extended waivers in July for service providers to continue for three more months, less than the six months the companies had sought.

Most other government agencies involved in the deliberations opposed any extension, a senior administration official said last month, adding that another reprieve will be harder to come by.

“Almost half the rigs are being run by the Yanks, and if the window shuts down on this in two months, then that’s really going to hurt Venezuela unless the Russians and the Chinese come in,” said Russ Dallen, a Miami-based managing partner at Caracas Capital Markets.

Output Risk

A U.S. Treasury official said the department doesn’t generally comment on possible sanctions actions.

More than 200,000 barrels a day of output at four projects Chevron Corp. is keeping afloat could shut if the waivers aren’t renewed. That would be debilitating to Maduro because the U.S. company, as a minority partner, only gets about 40,000 barrels a day of that production.

The departure of the American oil service providers would hurt other projects in the Orinoco region, where operators need to constantly drill wells just to keep output from declining. The U.S.-based companies are also involved in state-controlled Petroleos de Venezuela SA’s joint ventures in other regions such as Lake Maracaibo.

Limiting Exposure

Halliburton Co., Schlumberger Ltd. and Weatherford International Ltd. have reduced staff and are limiting their exposure to the risk of non-payment in the country, according to people familiar with the situation. The three companies have written down a total of at least $1.4 billion since 2018 in charges related to operations in Venezuela, according to financial filings. Baker Hughes had also scaled back before additional sanctions were announced earlier this year, the people said.

Schlumberger, Baker Hughes, Weatherford, PDVSA and Venezuela’s oil ministry all declined to comment.

Halliburton has adjusted its Venezuela operations to customer activity, and continues operating all of its product service lines at its operational bases, including in the Orinoco Belt, it said in an emailed response to questions. It works directly with several of PDVSA’s joint ventures, and timely payments from customers are in accordance with U.S. regulations, it said.

Hamilton, Bermuda-based Nabors Industries Ltd. has three drilling rigs in Venezuela that can operate for a client until the sanctions expire in October, Chief Executive Officer Anthony Petrello said in a July 30 conference call, without naming the client.

The sanctions carry geopolitical risks for the U.S. If Maduro manages to hang on, American companies would lose a foothold in Venezuela, giving Russian competitors such as Rosneft Oil Co. a chance to fill the void. Chinese companies could also benefit. Even if the waivers get extended, the uncertainty hinders any long-term planning or investments in the nation by the exposed companies.

Rosneft’s press office didn’t respond to phone calls and emails seeking comment on operations in Venezuela.


23 Comments on "Half of Venezuela’s Oil Rigs May Shut Down If US Waivers Lapse"

  1. ANAL REAPER on Fri, 23rd Aug 2019 7:42 pm 


  2. Robert Inget on Sun, 25th Aug 2019 10:21 am 

    Anal Hole is trying to shut down any worthwhile
    conversation on this web page.

    chalk up one for cowards

  3. Davy on Sun, 25th Aug 2019 10:55 am 

    Bob, fyi, Anal reaper is JuanP. I have outed that sock already

  4. Robert Inget on Sun, 25th Aug 2019 11:10 am 

    On topic.

    This article as much as admits, It’s Venezuela
    providing most if not all “unaccounted for”
    crude driving down oil prices for months.

    (The Gold standard for crude inventories for the entire world was the EIA (energy information agency). No longer.

    EIA is now another arm of the Trump political Administration.

    For months, EIA has reported millions of barrels of (possibly) Venezuelan oil as of “Unknown Origin”
    Vene crude is listed as zero imported.

    When the EIA gets caught in a deception, who can we trust?

    As for Venezuela. The article admits we have handed China and Russia The Game Changing
    Gift of ALL Time.
    Once China and Russia get the go-ahead from Trump, C&R will begin the long path to restoring
    infrastructure of our next door neighbor with unquestionably the biggest stash of the world’s
    crude actual crude oil.

    In simple terms, hold US hostage RE: ‘Terms of Sale’ One sure way for tariff punished nations would be not to accept USD$ as a measure of
    value for gold and oil.

    Trump, knowing or not is killing off the USD as the world’s exchange currency.

    Picture Canada, our last ditch go to oil exporter,
    selling half the oil to China it sell to the US, in just under a year.

    Shale Oil is going flat far faster than investors are willing to throw more money at it.

    IOW’s with the USD falling out of favor, we won’t be able to borrow the Billion Dollars per day it takes just to service our EXISTING deficit.
    Again, losing a super USD commits the US to

    Apart from Global Heatstroke losing Super USD$
    is our most urgent problem.

  5. Sissyfuss on Sun, 25th Aug 2019 6:49 pm 

    Too many urgencies to pick just one, Robt.

  6. intellectual nematode Alert! on Sun, 25th Aug 2019 6:52 pm 

    fyi, Anal Reaper is Davy, I have outed that sock already.

  7. elquardashianalamerikiakafmr on Sun, 25th Aug 2019 7:42 pm 

    Do not disrespect supertard
    Ok to say he muzzie lover stick to facts
    Thank you

  8. elquardashianalamerikiakafmr on Sun, 25th Aug 2019 8:35 pm 

    this is what happens around the farm,

    at a slight sign of trouble, the learjet is started and Big Goat would be airborne in minutes. That leaves a lot of us stuck on ground with unamputated muzzies.

  9. elquardashianalamerikiakafmr on Sun, 25th Aug 2019 11:00 pm 

    it’s bad enough that the medical industrial complex is supporting mass vaccination while also promoting personalized medicine. and now we have muzzies thrown into the mix. imam superatard (((daniel greenfield))) reporting the muzzie has been fired lara kolab.

    I’ll buy this muzzie for $1 to be amputated and held in supertard’s 10,000 acres.

    the whole thing about scientific objectivity is actually lovin’ of muzzies. there’s a parallel to this in india where govt. promotes secularlism and gandhiism which is actually muzzie love and dhimiism. just pay the jizya and they’ll leave dotheads alone, or do they?

  10. Dr. C. Everett Koop on Mon, 26th Aug 2019 6:00 am 

    “Anontard Do not disrespect supertard.”

    Shut-up, Davy, you sick fuck. How you are able to morph into so many socks and IDs is something only a crazy person can achieve, like your “formerly retarded paul” alter ego.

    It was the Italy jaunt that convinced you to conjure up “former paultard”.

    You are truly nuttier than a fruitcake. Your posts from the other day where you talked about cutting the limbs off of Muslim people takes the cake.

  11. elqarkashia-alamerikiakafmr on Mon, 26th Aug 2019 11:16 am 

    hey koop, you’re with a big muzzie beard as i recall.
    the reason we amputate muzzies so we don’t pay the jizya. you libs say you do it for compassion but it’s not your money and giving muzzies money makes you warm inside but they have repeatedly said it’s jizya. the payments to pakistan was considered jizya and the muzzie andy chowdary said it’s a jihad allowance.

  12. STFU juanpee on Mon, 26th Aug 2019 11:21 am 

    elqarkashia-alamerikiakafmr on Mon, 26th Aug 2019 11:16 am

  13. intellectual nematode Alert! on Mon, 26th Aug 2019 11:26 am 

    fyi, elqarkashia-alamerikiakafmr is Davy, I have outed that sock already as well.

  14. elqadarshianalameriki-akafmr on Mon, 26th Aug 2019 2:16 pm 

    hey anonymouse the tard aka c everett koop with big muzzie beard.
    from what i learned through excellent teacher imam supertard big muzzie beard, i forgive you.
    muzzie with big dot on his forehead shot 6 cops in philadelphia nd cops responded by loving muzzie 6 fold. your love i s only 2x so i’ll forgive you.
    but it’s hard to forgive when you insult supertard

  15. elqardashianalameriki-akafmr on Mon, 26th Aug 2019 2:28 pm 

    if you love muzzies so much why don’t you go on a date with big muzzie FGM nasty from minnesota? look at the family picture, bunch of posers, useless muzzie eaters here to be parasites on jizya, the wealth of which created by supertards for humble people like me to enjoy. i support my supertards, thank you very much

  16. Dredd on Wed, 28th Aug 2019 7:38 am 

    The fewer Oil-Qaeda rigs the better (Patterns: Conservative Temperature & Potential Enthalpy – 4).

  17. Davy on Wed, 28th Aug 2019 11:24 am 

    “LatAm Shockwaves Bring New Silk Road Into The Americas As Neo-Liberal Order Crumbles” zero hedge

    “Over the past several years Latin America has become a strategic battleground which involves much more than merely “geopolitical power plays” between the USA vs China as many commentators are asserting. Of course this is not to say that there are no geopolitical battles occurring. The entire western sponsored regime change operation in Venezuela couldn’t be understood unless one realized that China and Russia see Venezuela as a strategic ally in the Americas and a future zone for Belt and Road projects which are sweeping across the world… but something more is happening.”

    “Over the past three years, over 17 Latin American and Caribbean (LAC) nations have signed onto the new operating framework of the Belt and Road Initiative which extends far beyond the limited China-to-Europe corridor which many presumed it to be when it was announced in 2013. With its focus on long term planning and interconnectivity, China is already number one in vital infrastructure investments globally and while not number one in overall trade in the Americas, has now produced over six times more investment into Latin American energy infrastructure than the World Bank.”

    “This new paradigm has been a breath of fresh air for many nations of the south that have been gripped by Western drug money laundering, poverty, debt slavery and organized crime which has been kept in place by over four decades of IMF-World Bank dictates enforced by London/Harvard trained economists positioned as local governors over the bodies of nationalist leaders.”

    “In spite of the 17 nations on board the BRI, the big four powers (Mexico, Argentina, Brazil and Colombia) have not yet joined, which has been a frustrating obstacle for the greater vision of integrated infrastructure to blossom. However, in the past few weeks, even this has begun to change.”

  18. JuanP identity fraud on Wed, 28th Aug 2019 11:43 am 

    Well, look at it this way at least the juanpee troll contributes something when he does his Davy ID theft. It is better than his lunatic socks. I could give a shit what he post as long as it is intelligent. Most of the time Juanpee is just a mindless uneducated lunatic.
    Not Davy:
    “Davy on Wed, 28th Aug 2019 11:24 am “LatAm Shockwaves Bring New Silk Road Into The Americas As Neo-Liberal Order Crumbles” zero hedge”

  19. Davy on Wed, 28th Aug 2019 2:46 pm 

    Oops, sorry for getting all triggered and losing my shit again everyone.

  20. juanpee shit on Wed, 28th Aug 2019 2:53 pm 

    Davy said Oops, sorry for getting all triggered and losing m…
    Davy said IMA. There isn’t a damn thing we can do to stop th…
    More mindless juanpee ID fraud said The Real Davy on Wed, 28th Aug 2019 11:50 am

  21. more davy mindless shit on Wed, 28th Aug 2019 2:56 pm 

    juanpee shit on Wed, 28th Aug 2019 2:53 pm

  22. Davy & Socks Suxs on Wed, 28th Aug 2019 3:06 pm 

    DavyTurd, you’re about as original as the crusty poo found in your stinky underwear.

    I hate everything about you and your pathetic socks.

  23. More mindless juanpee shit on Wed, 28th Aug 2019 3:17 pm 

    Davy said @ Truth Buster Not a bad idea. It worked the first…
    Truth Buster said Davy, you have been a real bitch ever since your e…
    Davy & Socks Suxs said DavyTurd, you’re about as original as the cr…
    more low iq davy mindless shit said juanpee shit on Wed, 28th Aug 2019 2:54 pm
    more davy mindless shit said juanpee shit on Wed, 28th Aug 2019 2:53 pm

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