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Limited options for Venezuela

Venezuela's oil output is falling and fundamental change is needed to rescue it in 2017

Almost four years after Hugo Chávez's death, Venezuela is in a political maelstrom. As an opposition struggling for unity squares off with a resolute government, even the Vatican has entered the scene to try to bring calm. Amid the cacophony, the country's state-owned oil company, PDVSA, has managed the nearly impossible: a bond swap that seems to have pulled it back from the precipice of default - for now. That's good news, but PDVSA is not immune to the political stew in which it sits. In the current environment, it can't direct sufficient funds into the oil industry to stave off further production declines. We estimate that Venezuela's Q2 2016 production averaged 2.46m barrels a day. Th

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