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.
That political protest in Venezuela has lost momentum seems pretty obvious: people are no longer building barricades to block off streets near Plaza Francia in Altamira (eastern Caracas), an anti-government stronghold; no new images have been shown of brave and dashing protesters with bandanna-covered faces clashing with the National Guard in San Cristóbal, in the western state of Táchira; and those who dreamed of a horde of "Gochos" (Tachirans) descending in an avalanche to stir up revolt in Caracas have been left with no option but to wake up to reality.