#Venezuela #Oil Production #OOTT

https://www.genscape.com/blog/venezuela-hide-and-seek-genscape%E2%80%99s-flare-signature-intelligence

Venezuela: Hide and Seek with Genscape's Flare-Signature Intelligence

Devin Geoghegan, Global Director, Supply & Demand Analytics
February 13, 2018

Deciphering Venezuelan oil is akin to searching for a rusted penny at night in a muddy pond with only starlight to illuminate – you are better off relying on a metal detector. To provide transparency into the current situation, Genscape decided to deploy its proprietary flare signature methodology on Venezuelan oil production after having had success with Libya. As discussed below, we believe the work shines needed light in near-real time on Petróleos de Venezuela S.A's ("PDVSA") oil and other liquids production. Notably, Genscape's work disagrees with and sometimes front-runs benchmark data at key inflection points.

As with Libya, Genscape built the monitor using government, regulatory, and company data by field-area, and we mapped it to our proprietary flare signature methodology across time. The results are showcased in Figure 1 below along with a few key annotations.

Figure 1: The blue line represents Genscape's daily total liquids production estimate; the black line is the rolling five-day average of the estimated production; the red, green, and yellow lines represent the IEA, PDVSA, and OPEC, respectively. Note: given that PDVSA and OPEC only provide oil production, their time series has been modified to include condensate and NGL volumes. Click to enlarge

As shown in Figure 1 above, the monitor markedly disagreed with the benchmark data five times since April 2013. Twice it is lower and thrice higher. During late 2013 through Q3 2015, the monitor did not detect signal degradation to corroborated production declines shown by the IEA and OPEC. By Q3 2015, the three time series (Genscape's Monitor, the IEA, and OPEC) converged as production estimates by the IEA and OPEC rose slightly and the monitor detected signal erosion. However, in Q4 2015 the monitor detected significant signal decay (followed by a brief recovery) and indicated that production was running into problems several months before the IEA and OPEC reflected a new period of sharp declines. 

Subsequently, the monitor and the benchmarks moved in-line with each other until May 2017 when the monitor again detected significant signal declines. Part of these declines were the cessation of flare signatures from facilities in the El Salto and San Cristobal field-areas, which indicated production was again facing substantial headwinds. From that point through November 2017, the monitor showed production falling faster than the benchmarks.