History of The Venezuelan Oil Industry - 1977-1998 - Years of Decline

Years of Decline

After the 1973 oil crisis, the brief period of economic prosperity for Venezuela was relatively short lived. This especially was the case during the "1980s oil glut". OPEC member countries were not strictly adhering to their assigned quotas, and once again oil prices plummeted. By the 1990s, symptoms of the Dutch Disease were once again becoming apparent. Between 1990 and 1999, Venezuela's industrial production declined from 50 percent to 24 percent of the country's gross domestic product compared to a decrease of 36 percent to 29 percent for the rest of Latin America. On top of all these issues, the efficiency of PDVSA was coming into question over the years. From 1976 to 1992, the amount of PDVSA’s income that went towards the company’s costs was on average 29 percent leaving a remainder of 71 percent for the government. From 1993 to 2000, however, that distribution almost completely reversed to where 64 percent of PDVSA's income were kept by PDVSA leaving a remainder of only 36 percent for the government.