This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/17/2019

Overview

The oil and gas machinery sector (OGM) includes drills, derricks, well equipment, pumps, valves, heat exchangers, compressors, and parts suitable for this type of equipment.  U.S. exporters enjoy the advantages of cutting-edge technology and geographic proximity, and OGM has historically been in constant demand both by PDVSA and local and international companies.  Venezuela has traditionally ranked among the top 10 export destinations for U.S.-made OGM.  U.S. suppliers face strong competition with manufacturers in China, Germany, Brazil, Argentina, Colombia, and Italy.

To comply with the November 2016 OPEC non-OPEC deal curtailing output, Venezuela set a target of reducing its output in 2017 by 95,000 barrels per day (bpd) to 1.9 million bpd.  OPEC’s latest monthly oil market report estimated that Venezuela’s total crude oil production remains well below its output target, declining to 1.5 million bpd in May 2018.  Most analysts believe production will continue to decline through the end of 2018.  At the same time, PDVSA plans to increase production of natural gas to 11.9 trillion cubic meters per day and natural gas liquids to 255,000 bpd, but lacks the financial resources for the required capital expenditures to meet these targets.  Official proven crude oil reserves were reported to be 297.7 billion barrels in 2016, 257.1 billion barrels of which is extra heavy crude oil in the Orinoco Oil Belt.  Proven reserves of natural gas in 2015 were 197.1 trillion cubic feet.  Gas reserves include associated gas onshore and non-associated gas fields offshore.

Leading Sub-Sectors

Venezuela has historically been a significant purchaser of drilling rigs, casing and piping, control systems, double screw and submersible pumps, flanges, heat exchangers, automation equipment, mechanical separators, cranes, pipe taps, valves, and compressors.  Recently, PDVSA has taken steps to give majority-owned joint ventures with foreign oil company participation greater financial and procurement autonomy, significantly reducing the risk of non-payment to suppliers.  Nevertheless, several oil field services companies have reported long delays in payments for services provided to PDVSA.  The natural gas sector offers one of the best prospects for U.S. exports because the legal framework permits majority private sector participation.

Opportunities

PDVSA have said publicly in international conferences that they are interested in more partnerships with U.S. companies and welcome bids on upcoming concessions, tenders, and service contract opportunities.  However, U.S. companies report that significant barriers to such partnerships remain.

Web Resources

Petroleos de Venezuela, S.A. – PDVSA
 

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