Venezuela’s oil production fell to 13-year low in June, IEA says

PARIS (Bloomberg) -- Venezuelan crude production fell to a 13-year low last month as an economic crisis weighed on the OPEC member’s oil industry, the International Energy Agency said.

Output sank to 2.18 MMbopd, down 240,000 bopd from a year earlier and the lowest since February 2003 when an oil workers’ strike trimmed volumes. The drop in production is set to continue, with the IEA forecasting an annual slump of 200,000 bopd, double the decline it predicted last month.

“While Iran is clearly OPEC’s biggest source of supply growth this year, Venezuela is notching up the largest decline,” the agency said in its monthly report on Wednesday. Iranian production rose to 3.66 MMbopd in June, maintaining gains seen since the start of the year when international sanctions were lifted.

Venezuela’s oil production dropped by 120,000 bpd from April through June following electricity shortages, according to the IEA. Its predicted decline this year “looks unavoidable” as foreign oil-service providers curb operations and international oil companies face payment delays and “daily operational challenges,” the agency said.

The biggest production losses are at the mature fields of eastern Venezuela. The power shortages that followed a slump in water levels at the Guri dam, as well as the economic crisis, have accelerated natural declines at oil deposits.

The collapse in crude prices over the past two years has eroded state finances in a country that gets 95% of export revenues from oil. Venezuela’s crude-oil price currently stands at $39.60/bbl, 61% lower than the $100.64 of June 2014.