Venezuela has the largest known oil reserves in the world. Oil is the main natural resource, but there is also plenty of natural gas and coal. In addition, there are large deposits of iron ore, bauxite, gold, silver, copper, zinc, phosphorus, nickel, uranium, lead, titanium, carbon and diamonds.
The government has made efforts to strengthen mining to become less dependent on oil. In the 1990s, mining interests were sold to foreign companies, mainly North American companies. Since the turn of the millennium, companies in the industry have instead been nationalized. Today, the state controls most of the mineral resources. At the same time, many new companies, not least from China, have been invited as sub-stakeholders in mining.
COUNTRYAAH: Major exports by Venezuela with a full list of the top products exported by the country. Includes trade value in U.S. dollars and the percentage for each product category.
Venezuela is the third largest coal producer in Latin America. The country also has a lot of natural gas, which is mainly extracted by a subsidiary of the state oil company Petróleos de Venezuela SA (PDVSA).
The oil industry was nationalized in the mid-1970s. PDVSA is responsible for coordination, marketing and investments in the oil industry, while the Ministry of Petroleum determines the long-term development of the business. In the 1990s, the oil industry was opened to private investors, but when Hugo Chávez became president in 1999, he again increased state control and PDVSA became increasingly politically controlled. In August 2011, gold production was nationalized.
Abbreviationfinder: A popular acronym site in the world covering abbreviation for each country. For example, VZ stands for Venezuela. Visit itypeusa for more information about Venezuela.
Oil is mainly extracted in the Cuenca Oriental in the east and Maracaibo in the west. The United States has traditionally been the largest buyer. To reduce dependence on the United States, Venezuela has sought new markets, primarily in Asia. Lack of refining opportunities mean that Venezuela, despite its oil riches, imports gasoline. Now oil production has also fallen sharply due to lack of investment. At the beginning of 2020, production was one-quarter higher than just over ten years earlier, and then production collapsed even more (see Economic overview).
Despite the good supply of oil, hydropower accounts for around 70 percent of the electricity consumed. The majority is extracted at the Gurid dam on the Caroni River in the east, one of the world’s largest hydropower plants. Electricity prices are low and many in addition illegally connect to the electricity grid and steal electricity. Although production has almost doubled in a decade, it is not enough to meet rising demand. In addition, maintenance of the mains is neglected. Power shortages and power outages are common. Power outages have increasingly become a politically charged issue. The government claimed that sabotage was behind a violent explosion at the country’s largest oil refinery in August 2012, when some 50 people were killed and 800 houses destroyed. According to outside experts, the cause was a gas leak and a lack of maintenance.
During the acute political crisis in early 2019, more extensive power cuts occurred than ever before in Venezuela. The government and the opposition accused each other of being behind the attacks (see Current Policy).
In 2008, Venezuela signed a cooperation agreement with Russia to build the country’s first nuclear power plant. However, the plans were relieved after the severe nuclear accident in Fukushima in Japan in March 2011.
Air pollution in Caracas and the surrounding area is a serious environmental problem. In addition, the lakes Maracaibo and Valencia are heavily polluted. Venezuela is also at risk of being severely affected by the climate change that results from global warming. The mangrove swamp on the coast is submerged if the sea level is raised. Extreme weather conditions can cause landslides and flooding. When the amount of rainfall changes, electricity generation in hydropower plants is also affected.
FACTS – ENERGY AND ENVIRONMENT
Energy use per person
2,271 kilograms of oil equivalent (2013)
Electricity consumption per person
2661 kWh, kWh (2014)
Carbon dioxide emissions in total
185 220,000 tonnes (2014)
Carbon dioxide emissions per inhabitant
6.0 tons (2014)
The share of energy from renewable sources
12.8 percent (2015)
2011
September
Chávez is receiving conclusive treatment in Cuba
The president is reported to have his fourth and final round of chemotherapy treatment and is back in Havana for at least the second time since June. He has received a round of treatment in Caracas. During his stay abroad, part of his political power was transferred to Vice President Elías Jaua and Finance Minister Jorge Giordani.
August
The gold industry is being nationalized
President Chávez announces that the mining industry will be nationalized and that Venezuela’s 211-tonne gold reserve will be recovered from overseas. In addition, cash equivalent to $ 6.3 billion will be moved from the US and European countries, to more “friendly” countries such as China, Russia and Brazil.
June
Chávez is reported to have cancer
After several weeks of speculation about 56-year-old President Hugo Chávez’s health condition, he is reported to have been operated on for cancer in Cuba. According to the opposition, it is contrary to the constitution that the president governs from abroad.
Electric rationing is introduced
Disturbances in electricity supply in western Venezuela lead to rationing. President Chávez has blamed the electricity shortage on everything from the lack of investment by previous governments to sabotage, waste and increased demand due to increased wealth.
May
US sanctions against PDSVA
The state oil company PDSVA is subject to sanctions because of its sale of oil products to Iran. The government calls the decision “imperialist aggression”.
Drug king surrendered from Colombia
Walid Makled, who is accused of being a leading Venezuelan drug king, is extradited from Colombia to Venezuela. Makled has become something of a “hot potato”: the extradition takes place following a tug-of-war between Venezuela and the US, which makes Makled one of the world’s worst drug dealers.
April
Colombian Farc guerrilla leaders are arrested
A suspected Farc leader is arrested at Caracas airport, following a personal call from Colombia’s President Juan Manuel Santos to Chávez. The arrested person who is a Swedish citizen is reported to be Farc’s leader in Europe. The arrest is yet another sign of improved relations between neighboring countries following Santo’s accession in August 2010. A few months earlier, the two countries have signed a security agreement to combat drug trafficking along the common border.
January
The opposition again in Parliament
When the newly elected National Assembly gathers, the opposition participates again, after boycotting the Assembly since the previous election.
