Under President Chávez’s leadership, state-owned oil company Petróleos de Venezuela has been used to underwrite massive social spending. That’s kept him extremely popular among Venezuela’s poor. But it’s also left PDVSA with few resources for new exploration and production.
Karen Hooper is a Latin America analyst for private intelligence firm Stratfor.
“Chávez will definitely attempt to attract foreign investment into Venezuela, but he’s not a very credible partner at this point, and so he’s going to find difficulty in partnering with the major oil companies overseas.”
Hooper says without foreign investment, Venezuela’s oil production will continue to slip.
The U.S. remains the top export market for Venezuelan oil, in large part because Gulf Coast refineries are designed to handle the country’s heavy, sour crude. But U.S. dependence on Venezuela as a source of crude is falling. Last year, U.S. oil imports from Venezuela hit their lowest level since 1992.