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A Nationalization Misstep in Venezuela?

16 August 2016
Author
Thomas Lassourd
Topics
Commodity pricesLegislation and regulationState-owned enterprises
Countries
Venezuela
Stakeholders
Civil society actorsGovernment officialsJournalists and mediaParliaments and political partiesPrivate sector
Precepts
P1 P2 P6 P7 P8 P9 P11 P12 What are Natural Resource Charter precepts?
Social Sharing

In a recent blog post, petroleum expert Carlos Bellorín shares insights on one of the reasons behind Venezuela’s economic crisis.

Venezuela is heavily dependent on oil production for government revenue, social subsidies and imports of basic goods and medicines. But over the last few years, the Venezuelan economy has been severely impacted by a combination of low oil prices, declining production, and unsustainable public debts. Bellorín argues that a key reason behind the decline in petroleum production is exemplified by the case of the giant oil field El Furrial. With tremendous potential but a very complex geology, El Furrial needed constant inputs of complicated technology provided by international oil service contractors. As the government and state-owned oil company PDVSA moved to nationalize part of the petroleum industry, they did not ensure that they had the technical capacity to operate the field with the same efficiency. Both recoverable reserves and annual production fell markedly. This is a cautionary tale for governments considering an increase in their direct involvement in oil operations.
 
Thomas Lassourd is a senior economic analyst with the Natural Resource Governance Institute (NRGI).

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  • Topics
    Beneficial ownership
    Civic space
    Commodity prices
    Contract transparency and monitoring
    Coronavirus
    Corruption
    Economic diversification
    Energy transition
    Gender
    Global initiatives
    Legislation and regulation
    Licensing and negotiation
    Mandatory payment disclosure
    Measurement of environmental and social impacts
    Measurement of governance
    Open data
    Revenue management
    Revenue sharing
    Sovereign wealth funds
    State-owned enterprises
    Subnational governance
    Tax policy and revenue collection
  • Approach
    • Stakeholders
    • Natural Resource Charter
    • Regional knowledge hubs
  • Priority
    Countries
    • Colombia
    • Dem. Rep. of Congo
    • Ghana
    • Guinea
    • Mexico
    • Mongolia
    • Nigeria
    • Peru
    • Senegal
    • Tanzania
    • Tunisia
    • Uganda
  • Learning
    • Training
    • Primers
  • Analysis & Tools
    • Publications
    • Tools
    • Economic models
  • About Us
    • What we do
    • NRGI impact
    • Board of Directors
    • Emeritus Board Members
    • Advisory Council
    • Leadership team
    • Experts and staff
    • Careers and opportunities
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    • Financials
    • Privacy policy
    • Contact us
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