Venezuela needs 'urgent' action to address oil plunge - report

Venezuela must act quickly to address the effects of plummeting oil prices, according to the latest BNamericas Intelligence Series report.

The falling value of Brent crude has raised grave concerns about Venezuela's economy, which is largely dependent on revenue from oil exports.

The report, titled Outlook: 2015 Signals Broad Shift, says that Venezuela needs prices in excess of US$120/b to balance its budget – with suggestions that the figure could be as high as US$200. Oil accounts for 97% of the country's exports.

The report says that Venezuela could sell oil refining and transportation asset Citgo Petroleum, although this was recently denied by President Nicolás Maduro.

In addition, the report highlighted the fact Venezuela only sells around 845,000b/d on the open market.

And the country was this year forced to import its first ever batch of crude, from Algeria, to be used as diluent for its extra-heavy crude output from the Orinoco oil belt.

Changes in Venezuela were notable in 2014 as the oil minister and president of state hydrocarbons company PDVSA, Rafael Ramírez, was removed from his post. PDVSA agreed to pay Exxon Mobil for assets nationalized in 2007.

Venezuela still remains the largest oil reserve base in the world with 298Bb.

"But the world will not demand oil as it does today long into the future, and so the need to act is urgent," the report added.