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Venezuela sees oil exports financing almost two-thirds of 2023 budget

Published 12/05/2022, 09:43 AM
Updated 12/05/2022, 09:46 AM
© Reuters. FILE PHOTO: An oil tanker sails on Lake Maracaibo, in Cabimas, Venezuela October 14, 2022. REUTERS/Issac Urrutia
CVX
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By Mayela Armas

CARACAS (Reuters) - Venezuela's government expects oil exports to finance 63% of its national budget in 2023, a document seen by Reuters showed, a slightly higher proportion than this year, as U.S sanctions against the government are being reviewed.

The review could be positive for oil sales if it allows exports to the United States.

The government of President Nicolas Maduro sees the national budget equivalent to $14.7 billion, in line with the official exchange rate of 11.6 bolivars to the dollar.

The budget for 2023 is 8.5% higher than the budget for 2022, which came in at $13.6 billion.

Earnings from state oil company PDVSA will contribute $9.34 billion to the budget in 2023, according to the document, up 14% on the $8.2 billion it contributed to government spending in 2022.

The document did not mention crude prices or Venezuela's average daily oil output, as it used to until six years ago.

While global prices have risen this year, Venezuela's flow of oil revenues has been hit by lower production, which has declined due to years of divestment, mismanagement, and sanctions imposed by the United States in 2019.

Venezuela's crude output in 2022 has hovered between 600,000 and 700,000 barrels per day (bpd), according to data from the Organization of Petroleum Exporting Countries (OPEC), far below the goal announced by authorities of 1 million bpd.

Venezuelan officials hope oil production will recover after the United States extended U.S. oil major Chevron (NYSE:CVX)'s license to operate in the country in order to encourage talks between the government and the opposition on Venezuela's political and economic crises.

Tax revenues for next year are estimated at around $3.24 billion, according to the document, which will cover 22% of government spending.

© Reuters. FILE PHOTO: An oil tanker sails on Lake Maracaibo, in Cabimas, Venezuela October 14, 2022. REUTERS/Issac Urrutia

The rest of the budget will be financed with debt, including bond issues in Venezuela's internal market, and loans.

The document did not include detailed estimates of economic growth and inflation for the coming year. Annual inflation so far in 2022 stands at 155%, according to official data.

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