Venezuela: Crude Oil From Alegeria
Venezuela is due to receive a shipment of crude oil from Algeria on Oct. 26 of 2014 Several analysts believe that this shipment is an insult to the national sovereignty of Venezuela, a country that holds the world’s largest oil reserves.
The Maduro administration has been forced to take this emergency measure to reduce costs amid dropping oil prices. The average price of a barrel of Venezuela crude closed at $82.72 with no chance of increasing production at least in the short-term.
Venezuela produces extra heavy crude in oil fields which are in the southeast region of the country . The problem is that the oil is so dense, it needs to be blended with other components before it can be processed at the local refineries.
Caracas has decided to sign a contract with Algeria and start importing what is called Saharan Blend, an extra light crude, that can be diluted with the heavy crude of Venezuela and thus make the product easier to refine.
This measure will probably go unnoticed by the general population. President Maduro is so far refusing to raise the price of gas, which is practically being given away-as are other derivatives.
State subsidies cost the national coffers about 14.6 billion dollars, just in the first half of 2014, which is a 13.3 percent rise from the same period in 2013, according to Ecoanalitica, a an analysis firm that observes these statistics.
Meanwhile the government of Venezuela has shown other small measures of practicality. The government has decided to suspend all crude shipments that do not bring in any revenue,but are used for the exchange of essential goods from other countries.
Local oil production dropped by 195,000 barrels a day in the second quarter of 2014 and currently stands at around 2,700.00 barrels, according to independent firms also analyzing the situation.
(to be continued…)
