Oil activity could fall down to 15% in 2011 versus 1998
High oil prices and the oil boom have not boosted the oil gross domestic product (GDP). In fact, oil activity has been erratic in the past three years, with significant setbacks.
As reported by the Central Bank of Venezuela (BCV), in the second quarter of the year oil GDP grew 0.8 percent, resulting in a poor 0.1 percent growth for the first half of 2011.
Although the GDP in the second half of the year is better than the -0.5 percent plunge reported in the first quarter of 2011, it appears that the oil activity is not growing as expected.
In the words of Luis Oliveros, a professor of the graduate degree program in Petroleum Economics, Central University of Venezuela (UCV), "Pdvsa has a problem because it is unable to increase its oil output, as shown in the GDP. Oil activity is narrower; the state-run oil company has a production problem and also is getting absurdly into debt."
The oil expert commented that in 1998, when oil prices crumbled, "oil activity accounted for 19% of Venezuela's GDP. Today, it has fallen down to 12 percent. But it does not mean that the economy has diversified, because Pdvsa provides 95 percent of foreign currency entering the country. We still depend on oil at an unprecedented level."
Oliveros added that oil operations could fall down to 15 percent in 2011 compared to 1998.
A group of some 60 Venezuelan economists from across the country and from different generations and backgrounds, has met regularly in the past couple of years and now has brought forth a document explaining the reasons of the current emergency and outlining specific proposals on how to address the serious economic crisis the country has plunged into over the last three years.