Venezuelan Oil Is Largely Staying in Ground or Going Up in Smoke

This fading oil town has an eerie glow at night, illuminated by dozens of oil wells burning off precious oil and gas for lack of functioning equipment to process it.Every month, Punta de Mata’s smoke columns grow higher, a staggering waste at a time when Venezuela, the holder of the world’s largest oil reserves, desperately needs cash from every barrel to import scarce food and medicine. The wells are, quite literally, burning money. Making matters worse, for every barrel of light crude burned off at Punta de Mata’s wells, Venezuela needs to spend dollars importing a barrel of diluent to mix with the very heavy oil produced in the country’s south. “This is pure mismanagement,” said Carlos Bellorin, an oil analyst at IHS Inc. in London. “There’s no other rational explanation for such waste.” More…