Venezuela Oil Crisis: Financial issues cripple country's major source of income

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03:02

Venezuela's state-owned oil company has declared a maritime emergency after a German shipping firm took action over unpaid bills on Tuesday. This comes as the oil giant continues to struggle with a loss of qualified labor, lack of investment, and US sanctions against the country's biggest source of income. CGTN's Juan Carlos Lamas reports.

For forty-year-old Jairo Marcano, PDVSA was once a symbol of pride. Not anymore.

He achieved his dream of joining Venezuela's state-run oil company, spending four years as a ship captain.

But he says low wages and poor working conditions forced him to leave PDVSA, and return to the fishing industry.

JAIRO MARCANO FORMER PDVSA SHIP CAPTAIN "I have colleagues who work at PDVSA and want to be in my position as a fisherman, since profits are way better, but they need to learn how to fish first. I'm thankful I knew how to do it, even before entering PDVSA."

Venezuela relies overwhelmingly on its oil sales, with 90% of government revenue generated by oil sales. But in recent years production has dropped dramatically,

According to the Organization of Petroleum Exporting Countries, PDVSA went from producing nearly three million barrels per day in 2000 to just 768,000 in April of this year.

That's a 73% decrease in less than two decades and the biggest decline of any OPEC member state.

And while Venezuela's oil company has been hit by recent U.S. sanctions, experts agree PDVSA was already struggling.

ANTONIO ALVARADO OIL CONSULTANT "Due to the expropriation of companies which provided services from pipelines to transport to PDVSA, the oil production itself was affected, but years ago the government had money and used it to import what was needed, and that worked until there was no more money. Today the government is cashless."

PDVSA says it reduced its financial debt by five percent last year, but still owes some 34 billion dollars.

JUAN CARLOS LAMAS MARGARITA ISLAND, VENEZUELA "PDVSA has been struggling to pay debts to its suppliers for several years. There are a number of factors that play into the company's weak finances, including a sharp decline in oil output, mismanagement, and U.S. sanctions."

President Nicolas Maduro says those sanctions amount to a financial and commercial naval blockade - preventing his government from making international payments, as well as stopping all vessels with imported supplies from reaching Venezuelan ports.

Critics of Maduro argue his mismanagement of the economy has driven the decline, with little sign the nation's oil sector and PDVSA's fortunes will improve anytime soon. Juan Carlos, Lamas, CGTN, Margarita island Venezuela.