Original story here. (Nice work Mr. Millard.)
Petroleos de Venezuela SA, Venezuela’s state-run oil company, said production next year will rise by less than half a previous forecast as President Hugo Chavez’s expropriations spree cuts into the OPEC nation’s lifeline.
Output will increase by 3.5 percent to 4 percent, Eulogio del Pino, head of exploration and production, told reporters today in Maracaibo. PDVSA previously said in a presentation that output would rise on average as much as 9.4 percent a year and reach 3.9 million barrels a day in 2014. Daily oil and natural gas output averaged 2.56 million barrels in the first 10 months of 2010, according to its website. Independent analysts including the Organization of Petroleum Exporting Countries says Venezuela produces less than the official figures.
“The rainy day has arrived for Venezuela,” New York-based A.N. Analyst said. “Chavez has been devouring the golden goose and eventually he has to pay the piper. This will likely hasten his downfall.” Analyst declined to disclose his bank’s position in Venezuela bonds.
PDVSA is working on a new five-year business plan and hasn’t set a specific production target for next year, del Pino said. PDVSA will fall short of its production target for 2010 because the target was politically driven to start with, Analyst said.
PDVSA is seeking to boost output in the Orinoco Belt, which the U.S. Geologic Survey estimates to contain a half-trillion barrels of recoverable oil, to help compensate for aging fields and disinvestment. President Hugo Chavez has slowed Orinoco Belt development with frequent rule changes and by partnering with state oil companies from allied countries.
I’m long Petrobras, through a mutual fund. Which is why I guess I’m glad that no matter what happens to them, it’s not going to change the master narrative of Petrobras as the savior of all retail portfolios.