a few conflicting statements in this article ...

Reduction of petroleum imposes increase of production

International the financial crisis and the fears on a contraction of the oil demand have brought about a loss accelerated in the prices of petroleum at such level that in only two weeks register a fall of 16.5 dollars in the case of the Venezuelan basket, until being located in US$ 81.78 in the last day. The progressive loss of the prices of hydrocarbon intensifies the necessity of an increase of oil production, that during the first semester of 2008 was located in 3.244 million daily barrels, major in 110 MBD (4%) to the production average reached in the same period of 2007 of 3,134 MBD.

Maria Ramirez Hair
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During the first semester of 2008 the production was located in 3.244 million daily barrels

As of July, all the indicators have been descending progressively, and the Venezuelan basket does not escape to this behavior. In fact, the crude Creole goes in bite, because in two weeks there is handicapped in US$ 16.5 his value.

In agreement with the Ministry of the Popular Power for the Energy and Petroleum (Menpet), the prices averages of main the crude markers continued descending, “motivated mainly to the contract liquidation in the markets to future of petroleum before the fears because the American financial crisis affects world-wide the oil demand”.

The previous week, the reduction of the prices was attributed in addition to “the deceleration to the economic growth and the smaller demand of fuel in the United States”.

In which it goes of year, the Venezuelan petroleum barrel is located in US$ 101.33, number considerably superior to the obtained one in the 2007, when the barrel divided equally US$ 64,74.

On the other hand, basket OPEC closed the week in US$ 80.72, whereas West Texas Intermediate (WTI) was located in US$ 89.46, and the Brent of the North Sea reached US$ 85,12.

In the Venezuelan case, the Ramiro economist Oil mill, considers that in spite of the loss of the oil prices, Venezuela still owns “a comfortable” position when considering that budget 2008 was calculated with a barrel to US$ 35.

Venezuela had from 1986 to a 2006 price average of 20 US$ the barrel, value that begins to increase quickly as of 2007 and during the first semester of 2008. “Even though it has fallen to US$ 80, continues being four times greater the price with which we lived during 20 years”.

Nevertheless, it is important to emphasize that 90% of the Venezuelan exports are oil, in agreement with the Central bank of Venezuela, which demonstrates the dependency of this source of income.

Difficult prognosis
In agreement with the economist and university professor, this context prevents to foretell futures prices of petroleum, but it induces the necessity to construct scenes with diverse values in order of establishing conclusions and of taking forecasts.

“5 months ago a barrel of US$ 200, a quite high value was foretold. Now, a price of US$ 140 no longer is in the horizon by the change of the behavior of the world-wide demand. He would be prudent, then, to evaluate the levels of US$ 80 and US$ 70 and, why no, what would happen if it arrives at US$ 60”.

Oil mill assures that with an oil barrel to US$ 80, little less than the present value, “exists much manoeuvre margin in a good weather”.

In case the fall of the crude one persists, the reserve mattresses as the Bottom of National Development (Fonden) could cushion the loss.

Nevertheless, it noticed the necessity to realise a pursuit of the behavior of the oil market and, on the base of the concrete scene, to fit the fiscal cost and to adopt suitable economic measures. “At this moment, we do not see reasons to repress the cost, but the State must be prepared to know what budgetary spaces can be reconsidered”, it explained.

High-priority production
Besides a pursuit policy, the economist emphasized the necessity to stimulate the oil production, because before the loss of the prices “to increase the production she has a greater weight”.

Oil mill showed that the operational and financial results of the first semester of 2008 of Pdvsa give account about which the oil one “is in an important conjuncture trying to stimulate the production”.

And it is that the report of results of the state one reveals an increase in the investment of 85% when happening of 3,183 MMUS$ - in the first semester of 2007 - to 6,911 MMUS$ in the 2008. The greater investment registers in the reconnaissance area and production, considered in a 117%.

“From the financial point of view they would seem to be in a manageable situation, but it is necessary to have well-taken care of with the box of Pdvsa by the necessity of investments in the oil sector”, concluded.

Scenes and economy

The economic analysts have made exercises when raising diverse scenes for the price of the oil barrel.

The Ecoanalítica company considers that a price of the barrel to US$ 85, it would generate a positive balance of US$ 13,900 million in the current account of the balance of payments, and a consequent deficit global balance of US$ 11,200 million. Something similar would happen to a price of US$ 70, in which case the deficit of the balance of payments would be located in US$ 16,600 million.

Finally, with a barrel to US$ 50, the “present economic model ends up colapsando”, generating “twin deficits” with “negative balances as much in the current account as in the capital account, with a global deficit that would be located around US$ 23,800 million”.