It was nice while it lasted, but Venezuela’s minister of people’s power for oil and mining, Rafael Ramírez, has left us. He used to be considered a pragmatist and would offer plans that, while, ambitious, were often within the range of the human imagination. No more. Check out what’s happened to the oil output plans for state oil company Petroleos de Venezuela SA over the past eight years. The vertical axis is barrels per day. The lower left corner of each line is where the company says its starting out. The upper right end of the line is where it plans to end up, months or years later.
First, there’s the obvious: That the dude has been making and failing to fulfill unrealistic plans for a long, long time.
But what interests me here is the ever steeper slope of these lines. The slope represents just how fast PDVSA has to bring on new production in order to fulfill plans. Until 2010, they were talking about boosting oil output dramatically. The most ambitious was the Plan Siembra Petrolera, shown here as a slightly bolder line, which proposed increasing output from 3.3 million barrels a day in 2005 to 5.8 million at the end of 2012. (Let’s not worry about whether the baseline numbers were real. I’m focused here on the ambitions.) The idea, in other words, was to increase by 1,000 barrels a day, every single day, for seven years. That, however, is doable. PDVSA has done it before.
For the most part, the announced plans were less ambitious:
742 new barrels a day, every day for five years.
490 new barrels a day, every day for 24 years.
850 new barrels a day, every day for 10 years.
Ambitious stuff, but vaguely, theoretically, possibly within reason.
And then you get to this year, and the numbers get utterly goofy. Here’s Ramírez en El Mundo at the beginning of August, saying oil output is at 3 million barrels a day and will be at 4 million at the end of 2014. That would require almost 2,000 barrels a day of new production, every day through the end of 2014. A new 200,000 barrel-a-day Orinoco Belt heavy oil project every 100 days. In the 85 days since that El Mundo article, Venezuela’s oil output should have increased by 170,000 barrels a day.
In fact, all of Ramírez’s recent statement indicate he has gone off the deep end. In every announcement this year, he has indicated that output will increase by more than 1,300 barrels a day, every day, for years on end.
Soon, we can expect Ramírez to announce that in the next six hours, Venezuela will increase its oil output to 8.4 million barrels a day. And then we can expect Wall Street bond vultures to scoop up the country’s bloody corpse and have themselves an oily feast, while people in red shirts blame the evil capitalists and saboteurs.