Oil in Venezuela

3048 WordsNov 14, 200913 Pages
OIL IN VENEZUELA Venezuela 's proven oil reserves are among the top ten in the world. Oil generates about 80 percent of the country’s total export revenue, contributes about half of the central government’s income, and is responsible for about one-third of the country’s gross domestic product (GDP). Increases in world oil prices in recent years have allowed Venezuelan President Hugo Chavez to expand social program spending, bolster commercial ties with other countries, and boost his own international profile. Though Chavez has threatened to stop exporting Venezuelan oil and refined petroleum products to the United States, its biggest oil-trading partner, experts say a significant short-term shift in oil relations between Venezuela and…show more content…
Francisco Rodriguez, former chief economist of the Venezuelan National Assembly, writes in a 2008 Foreign Affairs article that income inequaly has increased during Chavez 's tenure, and further, Chavez 's social programs have not had a significant impact on infant mortality rate or literacy rates among Venezuelans. Oil is indeed the lifeblood of the South American country 's economy. It accounts for about half of total government revenues and about one third of gross domestic product. Venezuela produces about three million barrels a day of crude oil, and exports about 75% of that. And of the country 's $3bn-4bn in annual foreign investment, almost all of it is channelled into the energy industry. PDVSA PDVSA (Petróleos de Venezuela, S.A.), Venezuela’s state-owned petroleum company, oversees the exploration, production, refinement, and export of oil as well as the exploration and production of natural gas. It is the world 's third-largest oil company, behind Saudi Aramco and ExxonMobil. According to Tinker-Salas, after the nationalization of Venezuela’s oil in 1976, PDVSA was very much like a “state within a state” It “insulated itself from the government” and functioned largely as its own entity with control of the nation’s wealth. In 1980, PDVSA acquired CITGO, a

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