As the country with the world’s largest proven oil reserves, Venezuela has the potential to influence the oil markets in a big way.
“While Venezuela has a ton of oil underneath it, unfortunately for them, they have one of the highest costs [a] barrel to lift and process it,” among the Organization of the Petroleum Exporting members, said Tyler Richey co-editor of The Sevens Report.
Venezuela’s proved oil reserves was estimated at 300.9 billion barrels at the end of 2015, according to BP’s BP, +0.10% Statistical Revenue of World Energy June 2016. That’s below Saudi Arabia’s 266.6 billion and much less than the U.S.’s 55 billion.
But it cost Venezuela about $27.62 to produce a barrel of oil and natural gas in 2016, according to a story published by WSJ News Graphics last year, which cites data from Rystad Energy UCube. That ranks it as fourth in terms of major producers who pay the most to get the commodities out of the ground.
And profits have been cut significantly in recent years. Prices for the global benchmark Brent crude LCOK7, +0.51% trade at around $55 a barrel, down by about half from a high of roughly $113 in June of 2014. West Texas Intermediate CLJ7, +0.55% trades close to $53 a barrel, down from about $106 almost three years ago. …