Global banks rule out any increase in Venezuelan oil production before the end of the current decade.

 

 Venezuelan oil

Global banks rule out any increase in Venezuelan oil production before the end of the current decade.

Australia and New Zealand Bank said any significant increase in Venezuelan oil production looks unlikely before the end of the current decade, warning that investors willing to bet on a production recovery will need considerable patience and substantial capital.

The bank explained that the aging of oil infrastructure and technical and regulatory challenges will make periods of increased production in Venezuela longer than the usual global rates.

The bank added that maintaining a production level of nearly one million barrels per day would require annual investments exceeding $5.5 billion, while the cost of adding one million barrels per day of new production capacity could reach between $10 billion and $30 billion.

Venezuela holds 18% of the world's oil reserves, but its production is suffering due to international sanctions, corruption, and economic collapse. Here are key facts about Venezuela's oil and mining sectors, where US forces arrested President Nicolas Maduro on Saturday.

Official data shows that Venezuela has the world's largest estimated oil reserves, but its crude production remains at a fraction of its capacity due to mismanagement, underinvestment and decades of sanctions, according to Reuters.

The London-based Energy Institute stated that Venezuela possesses approximately 17% of global reserves, or 303 billion barrels.

The U.S. Department of Energy says Venezuela's reserves consist mostly of heavy oil in the Orinoco region in the center of the country, making its crude production expensive but relatively simple technically.

In 2019, Maduro and his then-vice president, Delcy Rodriguez, who is currently serving as president, announced a five-year mining plan aimed at boosting mineral extraction as an alternative to oil production.

The previous year, the Venezuelan government released data on mineral deposits and became confused when using key terms in the mining sector, including the terms reserve and resources, making it difficult to ascertain whether Caracas had a complete understanding of the country's mining potential.