Crude oil production from mature fields in Venezuela

October 26, 2018

In the absence of substantial project sanctioning since 2014, we believe most of the rigs in Venezuela are used for infill drilling to arrest declines of mature fields. Since spring 2016, rig count in the country started to fall as main drilling contractors, Schlumberger and Halliburton, curtailed activity due to deferred payments by the state operator PDVSA. Rig count reduction continued during the second half of 2017 and into 2018. The rig count is currently at 26 rigs, compared to an estimated 60-70 rigs required to normalize declines of mature fields to 6-7% per year. As a result, we forecast some mature fields, such as El Furrial, Tia Juana and Bachaquero, to lose around half of their production in 2018. Overall, we forecast crude production from mature fields to decline 35% y/y in 2018 and 25% y/y in 2019.

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