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Venezuela recovery plans
The petroleum curse
Since the first discoveries by Royal Dutch Shell in the 1920s Venezuela’s economy has been highly reliant on the oil and gas sector, a boon at times of high international prices and a curse during cyclical busts in the industry – of which there have been many. According to international estimates Venezuela has the world’s largest oil reserves, mainly concentrated in heavy crudes and oil-bearing tar sands in the Orinoco region. In 1960 Venezuela was one of the first five founders of the Organisation of Petroleum Exporting Countries (Opec). Two years after the first big Opec-led increase in international oil prices in 1973, Venezuela nationalised its own oil industry, creating a new national oil company (NOC), Petróleos de Venezuela or PDVSA. Typically, oil and gas production accounts for 25% of the country’s total economic activity, about 95% of export earnings, and for as much as 92% of government revenues.
