Venezuela shuts oil wells as US blockade hits exports: Report

Venezuela has begun shutting several oil wells in Orinoco Belt, home to world’s largest crude reserves, reflecting mounting pressure from partial blockade imposed by US administration on tanker movements to choke country’s financial resources.

Sources told Bloomberg that Petroleos de Venezuela Co. had started suspending operations at wells as of Dec. 28, after storage facilities filled up and inventories piled up due to disrupted export flows.

State-owned company is seeking to cut output from Orinoco Belt by at least 25% to around 500,000 barrels per day, a decline of about 15% of Venezuela’s total production of nearly 1.1 million barrels per day.

Decision, described as last resort, highlights scale of challenges facing government of President Nicolas Maduro, after it had sought throughout blockade period to maintain export levels as backbone of domestic economy.

Well shutdowns are seen as costly and difficult to reverse measure, given operational complexities and high expenses required to restart production later.