Venezuelan Oil Output Heads to 29-Year Low

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In a related story, Bloomberg News reported that Venezuela is set to pump the least oil in almost three decades, just when it needs petrodollars the most. Output is expected to slump to 1.84 million barrels a day next year, the lowest compared with official government data since 1989, according to a survey with four analysts compiled by Bloomberg. Rig counts hit a 14-year low in October, as drilling companies including Schlumberger Ltd. reduce their exposure in the nation due to unpaid bills. Owner of crude reserves larger than Saudi Arabia’s, Venezuela is teetering on the brink of default. Production of oil, the key commodity that brings in badly needed dollars to service Venezuela’s debt, will shrink for the seventh year. It’s not only that output is declining, says Thomas Olney, an analyst at consultant Facts Global Energy. Quality is going down as well, chipping away at revenues for state-owned oil company Petroleos de Venezuela SA. “Drilling is coming off in Venezuela, crude quality is deteriorating rapidly,” Olney said in a phone interview from London. Read more.