Venezuela's Long Road to Oil Production Recovery
Written by Emily J. Thompson, Senior Investment Analyst
Source: CNBC
- Current Production Status: Venezuela's oil production stands at only 800,000 barrels per day, significantly lower than the 3.5 million barrels per day seen in the 1990s, highlighting a severe decline since the nationalization in 2007, which impacts global supply.
- Investment Barriers: Despite possessing 241 to 300 billion barrels of recoverable oil reserves, the lack of investment and mismanagement has led to a 70% decline in production, causing skepticism among foreign investors, particularly U.S. oil companies, regarding re-investment.
- Future Potential: Analysts predict that with political stability and lifted sanctions, Venezuela's oil output could quickly rise to 1.2 million barrels per day within months, potentially reaching 2.5 million barrels per day over the next decade, but this requires an investment of $15 to $20 billion.
- Market Response: U.S. refiners have begun purchasing Venezuelan crude, indicating a warming demand for the country's oil, although short-term production changes are limited, the long-term potential continues to attract investor interest.
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Analyst Views on COP
Wall Street analysts forecast COP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COP is 113.39 USD with a low forecast of 98.00 USD and a high forecast of 132.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
15 Buy
3 Hold
0 Sell
Strong Buy
Current: 101.390
Low
98.00
Averages
113.39
High
132.00
Current: 101.390
Low
98.00
Averages
113.39
High
132.00
About COP
ConocoPhillips is an exploration and production company. Its Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. The Lower 48 segment consists of operations located in the 48 contiguous states in the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea, the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the United Kingdom. Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Venezuela's Long Road to Oil Production Recovery
- Current Production Status: Venezuela's oil production stands at only 800,000 barrels per day, significantly lower than the 3.5 million barrels per day seen in the 1990s, highlighting a severe decline since the nationalization in 2007, which impacts global supply.
- Investment Barriers: Despite possessing 241 to 300 billion barrels of recoverable oil reserves, the lack of investment and mismanagement has led to a 70% decline in production, causing skepticism among foreign investors, particularly U.S. oil companies, regarding re-investment.
- Future Potential: Analysts predict that with political stability and lifted sanctions, Venezuela's oil output could quickly rise to 1.2 million barrels per day within months, potentially reaching 2.5 million barrels per day over the next decade, but this requires an investment of $15 to $20 billion.
- Market Response: U.S. refiners have begun purchasing Venezuelan crude, indicating a warming demand for the country's oil, although short-term production changes are limited, the long-term potential continues to attract investor interest.
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TotalEnergies Extends Waha Oil Concessions in Libya to 2050
- Concession Extension: TotalEnergies signed an agreement with Libya's National Oil Corporation to extend the Waha oil concessions until 2050, with new fiscal terms aimed at boosting current production of approximately 370K boe/day, paving the way for a new phase of investments.
- Production Capacity Increase: The new deal is expected to raise Waha's production capacity from 340K-400K bbl/day to up to 850K bbl/day, potentially generating over $376 billion in net revenues for Libya, significantly enhancing the country's economic stability.
- North Gialo Field Development: The agreement includes the development of the North Gialo field, anticipated to add 100K boe/d to production, which will not only strengthen TotalEnergies' market position in Libya but also promote energy investments in the region.
- Political Stability Impact: The signing of this agreement marks a crucial step for Libya in stabilizing and increasing oil production after years of political disruption and underinvestment, reflecting international investors' confidence in the country's market.
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