There is a degree of irony in the decision of the State oil company, PDVSA, as the current head of OPEC, Ali Rodriguez, will soon take up the position of head of that company.
An unidentified source at the PDVSA said the new target would average 2.44 million bpod (of crude) for the year, which would be topped up by another 420,000 bopd of synthetic crude produced by upgrading heavy Orinoco oil. "The overproduction began in May," the source added.
"I understand we are going to produce 400,000 bopd over the quota, and I think that we will continue as long as the money is needed. The country needs the increase in order to reduce the deficit," said another PDVSA official. Both sources spoke on condition of anonymity.
Deputy Venezuelan Oil Minister Bernardo Alvarez denied the increase and reiterated that Venezuela is producing according to its OPEC quota.
During the nineties, Venezeula earned a notorious reputation for being OPEC's biggest violator of production quotas. However, since the election of populist Hugo Chavez in 1999, the nation has won kudos for its discipline in maintaining production quotas.
One of the sources said the Energy and Mines Ministry instructed PDVSA verbally to ramp up production, while the company requested a written order.
The sources said the Ministry wanted PDVSA to raise exports up to 2.86 million bopd including the 420,000 bpd of synthetic oil and the rest in crude. Since 1 January, Venezuela's OPEC production limit has been at 2.497 million bopd.
At a meeting of OPEC members scheduled for next week, the cartel is expected to leave official output quotas unchanged although it may decide in September to lift supplies for the fourth quarter.
