In 2010, oil GDP fell 2.2 percent compared to the previous year
Figures released by the Central Bank of Venezuela (BCV) on the behavior of the economy in 2010 raise new doubts about the operational capacity of state-run oil company Petróleos de Venezuela (Pdvsa), as oil production has declined to the lowest level in the last seven years.
The Year's End Message released by the BCV late in December 2010 reported that the Venezuelan economy fell 1.9 percent. Last year, oil gross domestic product (GDP) declined 2.2 percent compared to 2009, when it recorded a sharp drop of 7.2 percent versus 2008.
In real terms, and based on the Venezuelan bolívar's value in 1997, the BCV estimates that in 2010 the amount of barrels of oil and gas, as well as oil byproducts and refined oil products, was valued at VEB 6.33 billion (USD 1.47 billion) versus VEB 6.74 billion (USD 1.57 billion) in 2009.
Official data show that in real terms in 2010 oil production hit the lowest level ever since 2003. Back then, the economy fell 7.7 percent, amid a serious political and economic crisis, which included an oil strike and Pdvsa's declaration of force majeure, under which the firm curbed the amount of crude oil delivered to international markets.
In 2003, the value of oil production amounted to VEB 6.47 billion (USD 1.5 billion). In addition, it is worth mentioning that official data indicates that oil production in 2010 hit the lowest value ever recorded during the 12 years of Hugo Chávez's administration.
On the other hand, for the second consecutive year, the value of oil production declined. This is the fifth time in the past seven years that oil data decline at the end of a fiscal year.
The decline in oil activity occurred in a year when oil prices improved to an average of USD 72.6, compared to USD 57.01 in 2009. However, the operational capability of Venezuela's oil industry was significantly affected by poor oil services (which were seized and nationalized in 2009), by poor maintenance of rigs and oil shipping facilities, and a higher number of plant shutdowns.
The BCV also reported that oil refining increased by 1.3 percent in 2010 compared to 2009. The value of products and services related to the refining activity was VEB
972 million (USD 226 million) in 2010 versus VEB 959 million (USD 223 million) in 2009.
Translated by Gerardo Cárdenas
Following a wave of nationalizations carried out by the late President Hugo Chavez between 2007 and 2012, Venezuela has become the second most frequent respondent to investment treaty arbitration in the world (38 cases in total), after Argentina.