Petroleum Production - Foreign - Petroleum Development in Venezuela during 1928 (With Discussion)

Throughout 1928, production of oil from Venezuela steadily increased, and at the close of the year, the output was at the rate of nearly 400,000 bbl. a day. The total for the year was approximately 106,500,000 bbl., representing an increase of about 66 per cent. over the 63,000,000 bbl. produced in 1927. Venezuela now stands next to the United States as the second largest oil-producing country in the world; and there is abundant evidence to suggest that this relationship will endure for a number of years. Reserves were notably increased in the Lake shore fields, and the potential output of the Maracaibo Basin is much greater than the current production. In spite of this, the percentage of production increase was comparatively moderate, and the rate of this increase continued to fall off slightly, as has been the case for the last three years. This does not suggest that further annual increases in Venezuelan output will not materialize; only that the rate of these increases appears to be on the decline, and that with every succeeding year the future tendency will be in the direction of a stabilized level of output. The following table shows the production trend of the country since 1925: 1925 increase over 1924, 132 per cent. 1926 increase over 1925, 80 per cent. 1927 increase over 1926, 75 per cent. 1928 increase over 1927, 66 per cent. Many factors will work to prevent a reversal of this trend, but the principal ones are strong ownership in large-acreage units, and the probable indisposition of the world market to absorb a more rapidly increasing Venezuelan output at prices profitable to the producers. The distress oil element is not a factor in Venezuela; also, any unforeseen jump, such as results in the United States from the discovery of a Seminole or a deep sand at Long Beach, or Santa Fe Springs, is impossible in Venezuela, on account of lack of means for transporting a sudden surplus of oil, and the slowness with which additional transportation equipment in the form of shallow-draft tankers can be obtained.