AIME Annual Meeting, 16–20 February, New York

Abstract

The Republic of Venezuela occupies a strategic position in the Western Hemisphere, in so far as the security and defense of the free world is concerned. I will endeavor to review briefly in this paper the basic points of the development of Venezuela's oil industry, emphasizing in a very general way its strategic and economic significance. In this connection it is worth remembering that continuity and consistency have characterized Venezuela'spolicy with respect to the availability of oil supplies to the U.S. and to the free world.

Introduction

Venezuela is the second largest oil producing country in the world and the largest exporter. It accounts for roughly 14 per cent of world production, and 6 per cent of world oil reserves.

Owing to world demand, production of crude has continued to rise sharply. Only a small percentage of production is consumed domestically while the rest is exported.

Venezuela's production has been increasing steadily for the last 57 years, with brief interruptions. In 1920, the daily average production was about 1,235B/D. A production rate of 1,000,000 bbl daily was reached in 1946, and this had grown to 2,000,000 bbl daily by 1955. Thus it took 52 years to arrive at the first million barrels daily and 10 years to reach the two million bbl daily mark, and it seems likely that the three million bbl daily will be reached by1959.

It may be noted that two important factors influence the rate of production. One is as mentioned above, world demand for Venezuelan crudes and products, and the other is, a strict application of the conservation laws.

There have been several post-war interruptions in the rate of growth of production. Temporary setbacks in 1949 and 1955 were the result of fluctuations in the US economy and temporary "Oversupply" of world markets. The drop in Venezuelan production which first became evident in July of last year is the result of several factors among them a cessation of emergency demand, a slowing of industrial activity and of course the limit set on imports into the U.S. Within Venezuela, the most prolific fields are to be found in the Lake Maracaibo basin.

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