WEEKLY OIL REPORT
Week June 29th – July 5th 2020

PRICES

Oil prices this week continued their trend towards a recovery that began last May after the massive production cuts¹ of OPEC+ came into force.

OIL PRICES (JUNE-JULY 2020)

At the markets close on Friday, July 3^rd, the Brent and WTI markers were quoted at $42.72 and $40.19 per barrel, respectively, a 2.2% and 1.2% increase from the beginning of the week, when they were quoted at $41.77 and $39.70 per barrel, respectively. Regarding May’s quotations, the increase was 60% and 103%. The OPEC basket increased by 132% compared to May 18.

BRENT PRICE (MAY-JUNE 2020)

By the end of this week, WTI surpassed the $40 per barrel barrier; last time it exceeded that price was in March 2020.

WTI PRICE (MAY-JUNE 2020)

OPEC BASKET PRICE (MAY-JUNE 2020)

Due to the high level of compliance with the OPEC+ cuts and the progressive recovery in demand, driven by the increase in economic activity in China and Asia, added to the lifting of movement and flight restrictions in Europe, the price of oil has been showing a sustained recovery since May, although it is still 36% and 33% below its price at the beginning of this year, and the OPEC basket remains 36% below its price of $67 a barrel at the beginning of the year.

Although market fundamentals, especially on the supply side, have begun to gradually stabilize, all the markers are still well below their levels before the market collapse in March.

BRENT PRICE VARIATION
(JANUARY-JULY 2020) 

WTI PRICE VARIATION
(JANUARY-JULY 2020)

OPEC BASKET PRICE VARIATION (JANUARY-JULY 2020)

OPEC+’s decisive action has effectively managed to reduce the oil supply. Two months have passed since the entry into force of the 9.7 million barrels per day cuts, and its effect on the price is noticeable². It is now incumbent to monitor the recovery of demand, in order to restore the balance of market fundamentals and to be able to estimate the price of oil.

Some analysts, oil companies, and financial institutions estimate that the oil price will remain below $50 per barrel throughout this year and 2021.

Even though there are many uncertainties in terms of recovery in oil demand and, therefore, in the recovery of the price, operators in the oil sector have begun to take provisions, to protect their capabilities and safeguard their economic possibilities, so as to keep on going and survive this crisis.

Following the unprecedented crisis in the oil market caused by the Covid-19 pandemic, significant changes and rearrangements are expected in the oil market, including bankruptcies, acquisitions, and investment postponement by companies, as well as a political and economic impact in the producing countries, and even transformations in the energy matrix of the big consumer countries, affecting global oil geopolitics.

PRODUCTION

OPEC+

As indicated in our June 15 Oil Report³, the main weight (64.4%) of the 9.7 million barrels per day oil supply reduction has fallen to OPEC+ countries. In the last meeting of OPEC’s JMMC monitoring committee, compliance with the agreements by the member countries was estimated at 87% by May.

Based on information from tanker tracking firm Petro-Logistics, Reuters estimates that in June OPEC+ countries’ production fell by 1.25 million barrels per day⁴ from May levels.

Oil cuts by OPEC countries, estimated to be 24,195 million barrels per day, according to the organization’s Monthly Oil Market Report of June, have brought the group’s production level to its lowest level since 1991, during the Gulf War.

OPEC PRODUCTION (1991-2020)

At the close of the second month of the OPEC+ cuts, Russia and Saudi Arabia continue to give unequivocal signals of their political commitment to stabilizing the fundamentals of the oil market, monitoring compliance with the cuts commitments by the OPEC+ signatory countries.

On June 29^th, a report from the Saudi Press Agency (SPA) reported that Saudi Prince Mohammed Bin Salman Bin Abdulaziz and Nigerian President Muhammadu Buhari had a telephone conversation⁵ in which «… they reviewed the OPEC+ agreement and the ways of cooperation to enhance the stability of the oil markets.» This is a sign of the active pressure that Saudi Arabia is exerting on Nigeria and Iraq for them to meet their cuts and compensation production commitments to reach the volumes agreed at OPEC+

On the other hand, Russian Energy Minister Alexander Novak said on July 2^nd, at a conference⁶ on international energy and political risks of the Valdái Club and in reference to the collective control of production, that «there are different views and discussions on the role of coordinating agencies in stabilizing the situation in energy markets, but it seems to me that at this moment the practice of recent years has shown this role remains important.»

Covid-19 has strengthened the validity of the principles and fundamentals of OPEC and OPEC+ regarding the need to intervene in the market, to regulate supply and achieve a fair price for oil, a finite natural resource.

United States

Production in the US keeps the downward trend, according to EIA’s⁷ «This Week in Petroleum» report on July 1^st, which shows that by June 26^th the average production stood at 10.900 million barrels per day; this is 50 thousand barrels per day less regarding the previous week.

US OIL PRODUCTION FALL (MARCH-JUNE)

US oil production for June was on average 11 million barrels per day, a 15% drop in production when compared with production in January, which stood at 13 million barrels per day.

Drilling Activity in the US

According to Baker Hughes’⁸ July 2^nd report on the North America Rotary Rig Count, active drills for oil extraction in the United States continue declining and reached 185 units.

The report shows that between June 12^th and July 2^nd, the pace of reduction in the number of oil drills in the United States slowed down from 189 to 188 and now to 185, although these figures are far from the ones needed to regain the capabilities held before the pandemic -682 drills in March 2020.

ACTIVE DRILLING IN THE US
(MARCH-JUNE 2020)

Mexico

The latest report from Mexico’s National Hydrocarbon Production Center⁹ recounts a production level of 1.642 million barrels per day at the end of May, which is 84 thousand barrels per day less than the production of last April¹⁰, after complying with the OPEC+ cuts.

Mexico withdrew from OPEC+ June agreement to prolong the oil cuts¹¹. President López Obrador said his country was unable to make further additional production cuts to the 100,000 barrels per day reduction made in May. Oil production in this country has suffered a major setback due to the depletion of the Cantarell oil field, which has taken Mexico’s 2019 oil production to the same level as the production in 1979.

MEXICO OIL PRODUCTION (1979-2019)

Norway

Norwegian production at the end of May stood at 2.03 million barrels per day, just 2% less compared to April, when 2.11 million barrels per day were recorded. Such 32% decrease of the voluntary cut for May announced by the country matches OPEC estimates for the end of June¹².

ECONOMY

COVID-19

COVID-19 contagions¹³ reached 10.8 million people worldwide, with a global death toll of over 520,000, while those recovered people exceeded 5.7 million.

The most affected country is the United States, with over 2.7 million infections and more than 128,000 deaths, followed by Brazil, which is close to 1.5 million cases and is surpassing 61,800 deaths, while in Russia more than 660,000 are infected and 9,859 have died.

On July 1^st, the European Union (EU) lifted its restrictions on entry to third countries, excluding current COVID-19 hotspots such as the USA, Brazil, and Russia. The EU relied mainly on epidemiological criteria to contain the pandemic. The list will be updated every two weeks.

The People’s Republic of China seems to be keeping the virus and its impact under effective control. Meanwhile, in India, the government announced that it will lift the containment measures although COVID-19 is far from being controlled, with 625,544 cases; the same is true for Mexico, with 238,511 infections and 29,189 deaths¹⁴. In the United Kingdom, the number of deaths is currently 44,131.

According to the latest World Bank projections, which we referred to in our previous Oil Report¹⁵, the world economy will fall by 5.2% in 2020. On the other hand, the International Monetary Fund, in its updated «World Economic Outlook» report of June 8, indicated that the recession in 2020 could reach 4.9%.

Europe

Germany’s Chancellor Angela Merkel proposed the creation of the European Recovery Fund and supported the 750-billion-euro Recovery Plan¹⁶ that was proposed by the Commission within the framework of the budgetary analysis of the European Union for 2021-2027. Merkel asked EU countries to reach an agreement by July 31^st.

Economic forecasts for Europe are not encouraging. According to the European Commission and the International Monetary Fund, the economy will shrink by 7.5% in 2020. The Vice-President of the European Central Bank, Luis de Guindos, expressed in a July 1^st speech¹⁷ his concern about a slow economic recovery in Europe, due to the different fiscal stances of the Eurozone and the different degrees of confinement between countries; this officer also defended Germany’s response to the crisis of COVID-19 pandemic, although he stressed his concern, since «not all European countries are in a position similar to the one of Germany» and that is why  «the [European] Recovery Fund is so important.»

United States

Although the relaxation of lockdown measures and the reopening of businesses encouraged the stock markets –Dow Jones rose over 200 points¹⁸ on June 30^th, and real estate activity showed reassuring figures- several states resumed restrictive displacement measures and reduced commercial activity due to increased contagion.

On June 30^th, Anthony Fauci, Director of the US National Institute of Allergy and Infectious Diseases, warned at a Senate hearing that if public health recommendations are not followed, new cases could reach 100,000 per day¹⁹.

On the same day, Federal Reserve Chairman, Jerome Powell, told Congress that controlling the virus is the first step in ensuring an economic rebound.

According to the latest reports from the World Bank²⁰ (dated June 8^th, 2020) and the IMF²¹ (dated April 14^th, 2020), both organizations estimate a contraction of the US economy of 6.1% and 5.9%, respectively, for this year 2020.

Unemployment in the US

Regarding the unemployment figures in the United States, the Department of Labor reported 1,427,000 unemployment claims for the week on Thursday, July 2^nd, 2020²²; this figure is 55,000 less than the previous week, standing at 48,679,000 claims to date.

DECLINE IN UNEMPLOYMENT AID CLAIMS
(JANUARY-JUNE 2020)

The number of unemployed people in the United States reached 13.3% in May, a percentage comparable only to the «Great Depression» of 1929. In this COVID-19 age, a whole decade of progress in employment protection in the US could have been lost.

HISTORICAL DECLINE IN EMPLOYMENT IN THE US
(1930-2020)

Unemployment in the United States has become not only an indicator of the effect of COVID-19 on the American economy and the quality of those lost jobs but also a thermometer of the political situation. The fall of the economy, the increase of unemployment and police violence, along with the racial issues, have come to be key factors that hinder President Trump’s reelection.

The bankruptcy of the Chesapeake Energy Corp.

On Sunday, June 28^th, Chesapeake Energy Corporation²³ announced that it was filing for bankruptcy protection. The company, a pioneer in the shale oil extraction in the United States and one of the most important in the sector, was heavily indebted as a result of its dizzying growth, and the negative impact of the COVID-19 crisis on the demand for hydrocarbons helped accelerate its demise.

The downfall of this Oklahoma-based company is not an isolated case. Fracking companies such as Whiting Petroleum in North Dakota, Extraction Oil & Gas and Ultra Petroleum in Colorado, Sable Permian Resources and Lilis Energy in Texas —all well-known shale oil producers- have since April filed for Chapter 11.

These shale oil production companies became a decisive factor in the increase of oil production in the United States as of 2010, in what has been known as the «Shale Oil Boom».

“SHALE OIL BOOM” IN THE US

These bankruptcies in the fracking sector are a direct consequence of the oil price collapse from March onwards with the expansion of the COVID-19 pandemic.

Shale oil production needs a stable price level above $30-$40 per barrel, and since fracking is an operation based on the financial support of hedge funds, the deterioration of the economy and the oil price, along with the financial debts already incurred by the shale oil producers, have led to the decrease of their operations and the bankruptcies of small and medium producers.

Since the beginning of the oil price crisis, the US administration tried to keep its shale oil production afloat by buying and storing it in the Strategic Petroleum Reserve and by giving massive financial support to the sector; but this aid, of about $3 billion, was blocked by the end of March by Democrats in the Senate, following an environmentalist position on the subject.

Shale oil production may be the clearest victim of the oil market crisis and the price collapse; this was probably the undeclared target of the «price war» between Russia and Saudi Arabia. The decline in the production of shale oil dethrones the United States from its position as the world’s top oil-producing country that held at the beginning of this crisis and deprives it of its self-proclaimed energy “self-sufficiency”.

China

According to a report by the China Macroeconomic Fund (CMF)²⁴, the country is expected to make progress in a sustained recovery that will be evident in the second quarter of the year, forecasting 6.5% year-on-year growth in the third quarter of 2020, while for the fourth quarter the figure will rise to 7.5%.

The CMF document indicates that the GDP growth is estimated at 3% for the year 2020, thanks to the government policies implemented in the framework of the COVID-19 pandemic crisis.

Russia

TASS news agency reports on the declarations of Russian President Vladimir Putin²⁵, who informed his country will manage in the near future an inflation level of 4%, a 1% increase compared to the 3% the country faced before the health crisis caused by COVID-19. Putin also said that thanks to the progress of the Russian economy over the past 20 years, his country will overcome the pandemic crisis with minimal losses.

This week, the amendment to the Constitution of the Russian Federation was submitted to a popular referendum²⁶, a process that involved the participation of 67.97% of the population; the amendment was approved by 77.94% of registered voters, a high level of participation that grants the Russian government the legitimacy to advance in its political model.

Latin America

COVID-19 is in full expansion in the region, currently considered the epicenter of the pandemic, with 2.7 million infection cases and 121,662 deaths²⁷. Most countries have established containment measures, travel suspensions, and border closures.

Brazil and Mexico, the region’s largest economies, top the list of people struck by COVID-19, with 61,884 dead and 1,496,858 infected in Brazil and 29,189 dead and 238,511 infected in Mexico. The last IMF report, dated June 24^th, 2020, estimates a contraction of these large Latin American economies by 9.1% and 10.5%, respectively, for 2020.

Alicia Bárcena²⁸, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), indicated on Thursday, July 2^nd, that the productive activities halt due to the pandemic could generate the definitive closure of 2.7 million businesses in the region. The officer warned that the pandemic will cause the worst recession in the history of Latin America, with a contraction of regional GDP of 5.3% this year and an estimated increase in the regional poverty rate of 34.7%.

DEMAND

As we mentioned in our June 19^th Oil Report²⁹, both OPEC and the IEA are keeping downwards their estimates of global oil demand for 2020.

OPEC, in its latest «Monthly Oil Market Report» published on June 17^th30, estimates that the average drop in demand for 2020 will be 9.7 million barrels per day.

VARIATION BETWEEN WORLD’S SUPPLY-DEMAND OF OPEC OIL

For its part, the International Energy Agency (IEA) estimates in its weekly report in June³¹that the drop in the world oil demand will be 8.1 million barrels per day by 2020.

DROP IN GLOBAL OIL DEMAND 2020-AIE

The collapse of key oil demand factors

Quarantine and travel ban measures —adopted in the world’s major economies to curb the spread of the COVID-19 pandemic- as well as the downfall of world trade, have been the key factors in the collapse of global oil demand since the transport sector is responsible for 60% of oil consumption.

According to statistics from the International Air Transport Association (IATA)³², daily flights worldwide fell by 70% from their January activity levels this year.

COLLAPSE OF COMMERCIAL AVIATION

FALL IN AVIATION FUEL CONSUMPTION 2020

Furthermore, the World Trade Organization (WTO) Secretariat estimates that global trade activity will contract³³ between 13% and 32%, in both optimistic and pessimistic scenarios, which affects fuel consumption for the vehicles used to transport cargo and merchandise.

SCENARIOS OF THE FALL OF INTERNATIONAL TRADE 2020- WTO

This contraction affected the consumption of land, air, and sea transport fuels, influencing the refining sector, as well as the collapse of price.

The three big consumers

In the United States, it can be observed a progressive reactivation of the refining sector, which this week, according to the EIA report, is at 75% of its capacity³⁴, representing a 15% increase related to the record drop that occurred in March, although it is still far below normal activity levels.

US REFINING ACTIVITY- JUNE 2020

On the other hand, there is a slow increase in the seasonal demand for fuels due to holidays and the lifting of containment measures in some states of the country; despite that, gasoline and diesel inventories remain at levels well above the averages of the last five years, as a result of the collapse of demand in the first quarter of the year.

US DIESEL INVENTORIES

US GASOLINE INVENTORIES

The EIA reported³⁵ on July 1^st that oil consumption in the US stood at 17,353 MMDB, a drop of 6.5% from the figures of June 19^th, 2020.

In China, the progressive recovery of economic activity due to the lifting of restrictions and confinements influenced the recovery of the demand for oil and fuels.

For June, demand remained at the record level of 11.29 million barrels per day³⁶ reached in May.

On the other hand, the refining sector has been increasing its activity, as well as fuel consumption in the country.

INCREASING IMPORTS OF GASOLINE COMPONENTS IN CHINA 2020

In India, Oil Minister Dharmendra Pradhan estimates that by the end of September of this year, oil demand will be at its usual levels³⁷ (4.75 MMBD average in 2019), after lifting the sanitary measures that were taken in the country to face the COVID-19 pandemic.

«The economic unblocking has begun and many economic activities are taking place,» the minister told Bloomberg³⁸ on June 29^th, stating that demand for gasoline and diesel are reaching normal levels, with an average consumption of 88% over the same period in 2019.

STORAGE

This week, according to the July 1^st EIA report, US oil inventories³⁹ stand at 533 million barrels, representing a reduction of 7.2 million barrels (1%) from the June 19^th report. However, the inventories are still above the average of the last 5 years and they are 14% more than the data of the same date in 2019.

OIL STORAGE UNITED STATES 2020

For the fifth week in a row, coverage days continue to fall slightly⁴⁰ to 38.8 days this week, which reflects a reduction of 3% (1.1 days), after reaching 42 days of coverage on May 8 —when they peaked and the OPEC+ cuts began to be implemented- although the current figures are 40% higher than the coverage days in 2018 and 2019.

Floating Storage

As we have been pointing out, after the use of oil tankers as floating storage in March and April —due to the excess of cheap oil and the collapse of onshore storage capacities- progressive drainage would begin, due to the high costs of use.

DECREASE IN THE USE OF VESSELS AS FLOATING STORAGE 2020

VENEZUELA

The oil industry continues to be submerged in the worst crisis in its history, with an operational collapse that has caused oil and gas production to fall to 1943 levels, and the paralysis of its refining system, in addition to the inability to supply the domestic market, and the collapse of oil revenues and the entire national economy.

HISTORICAL EVOLUTION OF VENEZUELAN OIL PRODUCTION

The government’s intervention in PDVSA; the 7+ Boards of Directors appointed between 2014-2020, which were staffed following political affections with no knowledge of the sector and were subsequently  militarized (all in a general state of political persecution and the imprisonment of the company’s managers and directors); the deviation of resources, and the departure of more than 30,000 workers from 2016, all of these have been fundamental factors in this unprecedented implosion in the Venezuelan oil industry.

As we pointed out in our June 26^th Oil Report, the last OPEC report points out the continuous fall in the country’s oil production -even though Venezuela is not part of the cut agreements. In May its production fell 57 MBD to only 500,000 barrels per day.

DROP IN PRODUCTION IN VENEZUELA (2013- MAY 2020)

Regarding production in June, in the absence of official information mechanisms and due to the silence of the authorities, there is a negative expectation that production drop will be even bigger than that reported in May since the effect of the departure of Rosneft, Chevron, and the international service companies due to the sanctions imposed by the United States, as well as the dismantling of PDVSA’s facilities and the reduction of its capacities will be felt more strongly in June.

According to internal sources, PDVSA is unable to handle its exports, due to the abandonment of its fleet of more than 33 of its own vessels (by 2014, PDVSA was capable of handling 45% of its production with its own vessels and with 83 vessels owned by transport mixed companies), and due to the US sanctions. The country’s onshore storage capacity, which lost its terminals in Curaçao due to non-payment of the lease, reached its maximum, paralyzing its scarce production, while Venezuela’s numbers reported to OPEC reflect, in a high percentage, inventory drainage volumes.

Reports by Bloomberg indicate that, despite the latest government intervention and the privatization of core activities, the country will continue to experience a sharp drop in production, with a 32% reduction in June⁴¹ of its May production levels, almost 200,000 barrels, based on documents reviewed by the news agency.

DROP IN OIL PRODUCTION IN VENEZUELA (JANUARY-JUNE 2020)

In the report, Bloomberg points out that during the first half of June the biggest drop in production was seen in the Orinoco Oil Belt at 148,000 barrels per day, which represents a drop of 50%, while in Lake Maracaibo production stood at 83,600 barrels per day, a 40% drop.

For its part, the energy agency S&P Platts⁴² said that oil production in Venezuela fell to 280,000 barrels per day, a drop of 50% compared to May’s production reported to OPEC.

As informed by Reuters, in a July 1^st note⁴³, Venezuelan oil exports reached their lowest level since 1943; this means a strong impact on the national economy, as oil is the main source of income of the nation.

Gas Stations to Private Sector

The Venezuelan refining system continues to be inoperative, despite continuous announcements by government spokespersons, and despite failed attempts to reactivate the system, especially in some units of the Paraguaná Refining Complex and the El Palito Refinery, tasks that are being carried out by private national and international companies, especially from China and Iran, but without showing concrete results, or stabilizing the refining and fuel production operations.

The government continues to manage its internal market with fuels imported from Iran, with ongoing and strict confinement measures that have paralyzed the entire country.

Furthermore, the government announced the creation of Gas Stations for the exclusive sale of fuel at international prices and in US dollars, so they have evicted current private operators from these fuel stations, to deliver them to private sectors close to the government.

On June 27^th, it was announced that PDVSA notified gas stations in some cities of the country that they had to hand over back the fuel facilities within 72 hours, a unilateral measure taken by the Venezuelan government, according to a report issued by Reuters⁴⁴ and to denunciations on social networks by those affected.

This situation surprised the gas station operators, who, in many cases, had maintained these concessions for decades. Among the states where gas stations were notified are Capital District, Carabobo, and Sucre. There are many doubts regarding this decision by the Venezuelan government since the eviction was requested without any type of compensation, according to those affected.

The presence of transnational companies in the Essequibo

On different occasions, we have denounced the presence of transnational oil companies that intend to produce oil offshore the Essequibo Territory, which is part of a dispute between Guyana and the Bolivarian Republic of Venezuela that goes back to the null 1899 Arbitration Award, by which the English Crown took the extensive Essequibo territory from Venezuela, in a colonial plunder.

As of 1966, both countries -Guyana obtained its independence in 1970-signed the Geneva Agreement to seek, through the figure of the «Good Officer» appointed by the United Nations Secretary-General, an amicable solution to this dispute.

However, in 1999, at the beginning of President Chávez’s government, the Guyanese government granted concessions⁴⁵ to ExxonMobil and Hess to operate in the marine areas of the Essequibo Territory.

In the then-Ministry of Energy and Mines, we prepared at the time the technical information to demonstrate the violation of the Geneva Agreement made by the Guyanese with the granting of the concessions, and, along with the Ministry of Foreign Affairs, it was issued a formal complaint that made Guyana desist from its intentions.

OIL BLOCKS OFFSHORE ESEQUIBO TERRITORY

After President Chavez’s death in 2013, the Guyanese governments of Ronald Ramotar and David Granger (who was elected in 2015 with the declared intention of giving access to transnational oil companies) reactivated the issuance of operating permits to ExxonMobil, Total, Repsol, Anadarko, Tullow and CNOOC of China, for oil exploration in the Pomeroon and Stabroek blocks, offshore the Essequibo Territory.

Although maduro’s government has been negligent, both diplomatically and politically, in handling these illegal actions of Guyana, the reason lies with Venezuela. The Geneva Agreement cannot be unilaterally denounced and taken to the International Court of Justice, as Guyana claims.

While Guyana was taking illegal and de facto possession of the territorial sea of the Essequibo Territory, the government of maduro was seeking a secret negotiation⁴⁶ with ExxonMobil, to propose joint exploitation in the areas already granted to the company in a unilateral way by Guyana. ExxonMobil would not even receive the Venezuelan delegation led by the then-Foreign Minister Delcy Rodriguez, who is now Vice President of the government.

In 2018, the Guyanese Minister of Natural Resources, Raphael Trotman, recognized that the concession granted to ExxonMobil of the Stabroek block was part of his country’s strategy against Venezuela’s border claim. In January 2000, this US transnational company announced that it had increased its base of recoverable resources⁴⁷ in the Stabroek area to more than 8 billion barrels of oil equivalent, while the first shipment of crude oil was being sent to the United States, a million barrels of light sweet oil extracted from the Liza-1 field and sent from the Liza Destiny floating platform to an ExxonMobil refinery in Galveston, Texas, United States.

Since David Granger took office as president of Guyana – May 2015 and was re-elected in the March 2020 elections- no fewer than 16 oil field discoveries have been made.

On December 20^th last year, ExxonMobil began exploitation⁴⁸ in the Liza-1 sector, using the first production, storage, and unloading vessel in the country. In June 2020, the transnational reduced its production in that offshore field by 25 to 30 thousand barrels a day, due to the risk of excessive gas flaring.

The actions of the transnational oil companies in the territorial sea of the Essequibo are taking place at a time of deep weakness and political and institutional crisis that is keeping Venezuela paralyzed and unable to exercise effective action in claiming its rights; however, it is a matter of time for this to happen. The presence of the transnational oil companies in an area in dispute is not only illegal -and the oil extracted without the consent of Venezuela is a natural resource that is being stolen from our country- but this unauthorized presence, in fact, takes away an extensive territory from the nation and blocks the access of Venezuela to its Atlantic coast.

These elements constitute the basis for a future conflict once Venezuela recovers the governability and legitimacy of its institutions since the country is obliged, by any means, to defend its sovereignty and recover all its territorial spaces and the natural resources found there.

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39. This Week in Petroleum, U.S. Energy Information Agency (EIA), 01 julio 2020.
40. This Week in Petroleum, U.S. Energy Information Agency (EIA), 01 julio 2020.
41. Venezuelan Crude Output Falls for Sixth Month, Deepening Crisis, Bloomberg, 30 julio 2020.
42. La producción petrolera de Venezuela se derrumbó a 280 mil b/d en junio, Platts, 02 julio 2020.
43. Exportaciones de petróleo de Venezuela se hunden en junio a mínimo en 77 años: datos, Reuters, 01 julio 2020.
44. Pdvsa ordenó entregar las estaciones de servicio en 72 horas, Reuters, 27 junio 2020.
45. Hess’ confirmation of payment of US$30 million raises serious red flags for Exxon, Stabroek News, 22 noviembre 2019.
46. ¿Cómo llegó a la Corte Internacional el diferendo de Venezuela con Guyana sobre el Esequibo y qué intereses lo impulsan?, Rafael Ramírez, 28 junio 2020.
47.   ExxonMobil ups Guyana recoverable resources to more than 8 billion oil-equivalent barrels, makes discovery at Uaru, ExxonMobil, 27 enero 2020.
48.   ExxonMobil begins oil production in Guyana, Exxon Mobil, 20 diciembre 2020.