Venezuela's economic status quo is very grim, at the end of 2018 the inflation rate has reached 10,000%, it is reported that prices are more than 400 times in less than a year soared, the government is burdened with 152 billion U.S. dollars **** labor debt and 110 billion U.S. dollars of foreign debt, basically at present need to pay off the foreign debt with oil.
As a member of OPEC, Venezuela has oil reserves of 300.9 billion barrels, which is Saudi Arabia, the Middle East oil baron 1.4 times, its geographical location in South America, natural resources are also preferred, can be said to be the country of choice, how to get to this field today.
Basically, many professional analysts have pointed to Chavez's political and economic system reforms, such as the nationalization of oil fields, communications, electricity, cement, steel, rice processing plants, coffee, banks, supermarkets and other national pillar industries, the implementation of rationing, government subsidies to launch a series of improved welfare system, such as free public **** medical care, affordable housing, work insurance, maternity subsidies. As a result of its dependence on oil, Venezuela's other industries have all shrunk or even disappeared, and even daily necessities need to be imported.
The final result is that 95 percent of Venezuela's export earnings and 45 percent of its revenue come from oil. The government's high welfare subsidies are supported by 80 percent of the annual revenues of Venezuela's state-run oil company. In recent years, when oil has fallen off a cliff, Venezuela's oil companies have become financially insolvent and even heavily indebted, and with them, government revenues have plummeted off a cliff.
And because Venezuelan crude oil belongs to the heavy oil, its mining, transportation and refining to ease the cost and technical requirements are much higher than the light oil, such as Venezuelan crude oil mining cost is about four times that of Saudi Arabia, which requires constant technical equipment upgrading and maintenance to reduce the cost as well as to expand the production, as a result of the high oil prices did not want to think about the industrial upgrading, and even more did not want to think about the oil industry's capital and technology investment, resulting in the cost of mining in the high oil price.
Costs are high, production has been declining, and the international price of oil has been declining, can the Venezuelan oil industry make money? The oil companies have no money, the Venezuelan authorities still have fiscal revenues?