FY 2013 Budget Law differs from state oil company's business plan
Minister of Petroleum and Mining asserted their estimates are based on "production capacity"
Venezuela's draft Budget Law for fiscal year 2013, recently presented to the Executive Office, includes oil premises no other than the same ones presented in FY 2012 Budget Law in terms of production and exports volume. Nevertheless, such premises are contrary to the goals set forth in the business plan presented by Venezuela's state-run oil company Pdvsa.
Both Minister of Planning and Finance Jorge Giordani and Minister of Petroleum and Mining Rafael Ramírez said at the National Assembly that income provided for in the FY 2013 Budget Law is based on oil and liquid natural gas outputs at 3.01 million barrels per day (bpd) and 165,000 bpd, respectively, and exportation at 2.52 million bpd.
Nevertheless, Pdvsa's business plan provides for an oil output at 3.46 million barrels and exportation at 2.8 million barrels for the same period.
Production goals have not been achieved so far this year. The Organization of Petroleum Exporting Countries (OPEC) has recently indicated in its Monthly Oil Market Report that Venezuela reported oil production in August at 2.82 million bpd contrary to the initially production goal, which is 3.01 million barrels. However, the oil minister said on Wednesday at the National Assembly that oil output accounted for 3-3.1 million bpd.
Output vs capacity
In late 2011, Venezuelan President Hugo Chávez announced that Pdvsa would increase oil production to 3.5 million bpd. This would be attained by means of early production in new projects undertaken at the Orinoco Oil Belt and the recovery of barrels that were not produced by the joint ventures that migrated from operation agreements and strategic partnerships at the Orinoco Oil Belt.
Later during the same year, Pdvsa changed its goals and announced oil output at 3.13 million bpd for 2012 and 3.5 million bpd by the end of that year.
"We have always referred to our goals as production capacity. We have not estimated it yet, but will do it by the end of the year," Oil Minister Ramírez informed Reuters.
Notwithstanding, Pdvsa expectations over early production by late 2012 in new projects at the Orinoco Oil Belt are less ambitious. Early output in seven of them has been estimated at 100,000 bpd, especially by December, yet this implies a 41% reduction as 160,000 bpd had been estimated at the beginning of the year.
Translated by Jhean Cabrera
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