Venezuela is a country that place at South America. Its official name is República Bolivariana de Venezuela. Its International Reserves: US$ 29,468 billion, GDP (Purchasing Power Parity): $381.3 billion of International dollars, GDP per capita – PPP: 12,920 International Dollars and its Real GDP growth: 5.6% (Source: World Bank, 2012.) Venezuela is a developing country today. And it deals with exportation of oil as a means of sustaining the country economically. Most of countries like Saudi Arabia (1th), Russia (2th), and United Arab Emirates (3th) etc. are dependent on their oil export economically. Oil export has significant effect on people life in these countries and also the oil export affects other sectors. Not in Russia, but in Saudi Arabia and Venezuela, other sectors development can only be provide by oil export. However, Venezuela is a bit different for the reason that the oil trade has not had a very positive effect in the sector of quality of life improvement. Venezuela is world 10th oil exporter, but it is still not doing well. So what is the reason behind that? This paper will also include Dutch disease in the oil industry of Venezuela and the changes in the industry. Political events affected Venezuela’s oil industry. This will be written, too.
In the period of 1920-1970, the country was a global oil exporter. Its position is 10 these days, because there were wars in the middle-east. The wars in the Afghanistan and Iraq make oil reserves to reduce. The current leader is Nicolas Maduro who has influenced by Hugo Chavez, had very big impact on Venezuela. In the earlier of Hugo Chavez’s management oil prices increased rapidly. And in these days, the US had to buy oil from Venezuela because the US needed oil to produce energy.
There is four parts of oil industry in the Venezuela, the discovery and initial production of oil (1912-1943), Venezuela’s assertion of control over the oil industry (1943-1974), the oil boom and nationalization of the oil industry (1974-1998), and the government’s attempt to regain control over an increasingly independent oil industry (1999-2003). (Wilpert, 2003)
Discovery and primary production of oil (1912-1943): In the pre-Colombian times, oil leaked to the Venezuela and it was found. It was drilled in the 1912. In the beginning, foundation of the petroleum made Venezuela became worlds 2nd producer of oil. The name of the firm that first producer in the Venezuela is Rockefeller’s Standard Oil and Royal Dutch Shell (RSORDS.) From 1920 to 1935, the share of the oil, in the total export, increased 1.9% to 91.2%.
Affirmation of power over the industry by Venezuela in 1943-1974: in the 1943, the government confirmed an oil policy. The policy is compatible with Hydrocarbons Act. Before this policy, oil incomes depend on customs and concessions. After the policy, oil income became to depend on taxes income from mining. In these days, oil overproduced. After the middle-east countries and Venezuela forced other oil...