Nation with largest oil reserves has just one rig

US sanctions cripple Venezuela output

Venezuela’s fall from oil superpower to failing producer can be illustrated in one image: a single rig working the world’s largest oil reserves.

As fields across the nation shut amid a relentless US campaign to cut Venezuela off from global oil markets, the number of rigs drilling for crude fell to just one in May, according to data from Baker Hughes.

That marks a

96 per cent decline since January, when drilling fell to levels not seen since 1963. Having a single active crude rig takes the country back to the beginning of its oil industry, well before it became a founding member of the Organisation of Petroleum Exporting Countries. The development underscores the toll that US sanctions have taken on the nation as President Donald Trump escalates efforts to oust Venezuelan President Nicolas Maduro.

Shutting fields

State-owned oil company Petroleos de Venezuela SA has been gradually shutting fields due to fewer buyers, low prices and lack of both investment and personnel. In May, about one-third of the 77 oilfields across the country were producing zero barrels and more than 10 per cent pumped less than 500 barrels per day, according to PDVSA production data. Many of the shuttered fields are joint ventures between PDVSA and foreign partners including China’s CNPC, Cubas’ Cupet or Angola’s Sonangol.

The last remaining rigs in Venezuela were located at the Maracaibo basin and the Orinoco Oil Belt.