National oil production will not return to normal levels this year, analysts say.
With most of Venezuela back at work, President Hugo Chávez has emerged from a devastating 2-1/2-month strike with control of a key asset - the petroleum industry.
Mr. Chávez's opposition had taken control of the state-run oil company, Petroleos de Venezuela (PDVSA), on Dec. 2 and slowed production to a trickle. But Chávez consolidated power by firing as many as 12,000 of the company's 38,000 workers and calling in retirees as replacements.
The company has raised production faster than many industry analysts had expected - up to 1.9 million barrels a day, according to the government. Ali Rodriguez, PDVSA's president, says that he expects production to rise to "near normal" levels by mid-March. Venezuela produced 2.8 million barrels a day before the strike.
But some analysts say it could be months, if not years, before Venezuela returns to the ranks of the world's oil elite. For a country that relies on oil revenue for 80 percent of government funds, this could be a blow to funding of social programs and even lead to oil-industry privatization.
"At the end of the day, PDVSA will not get back to where it was any time this year," says Larry Goldstein, President of the International Petroleum Research Foundation in New York.
Getting pumps and refineries going again is not as simple as throwing a switch. The oil behemoth's skeletal staff has to tussle with complex engineering tasks, from gauging oil flow in dormant pipes to reconfiguring computer systems to replacing a catalytic cracker module on a stalled refinery. Half of Venezuela's petroleum comes from particularly viscous oil deposits, and many wells became filled with sand after the oil pressure was cut.
"Some fields you should never shut down, and they were shut down," says Ramon Espinasa, a consultant at the Inter-American Development Bank in Washington and a former PDVSA economist. "A large number [of wells] will have to be redrilled."
Mr. Goldstein says that some wells will have to be abandoned altogether. He estimates that 400,000 barrels per day have been permanently lost.