Venezuela has more crude oil than any other nation. But the crisis there is so bad that even oil companies are losing big money.
The world's largest oil service provider, Schlumberger, announced Friday that it wrote down $938 million of its holdings in Venezuela. It already took a $460 million loss last year because of unpaid bills from the Venezuelan government and its state-run oil company.
Schlumberger (SLB) makes equipment for oil companies and provides them expertise and technology. The company says it will stay in Venezuela and try to get its money back. But that could be difficult.
The country owes almost $60 billion to contractors and suppliers like Schlumberger, according to an analysis published by Harvard Law School, and it already defaulted on some of its bonds late last year.
Schlumberger's losses show how dire the political, humanitarian and economic crisis has become in Venezuela. As the company scales back operations, Venezuela won't be able to pump as much oil, its only source of revenue, while shortages of food and medicine worsen. Oil makes up 95% of Venezuela's exports.
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Only 50 oil rigs were running in Venezuela in December, down from 81 three years earlier, according to Baker Hughes, another oil service provider. The number has declined even though oil prices have gone up in the past year.
Total oil production from Venezuela was down 29% in December from a year earlier, according to OPEC, and the decline is accelerating.
Venezuela's troubles have spiraled in part because it's severely behind on payments to oil service providers like Schlumberger, Halliburton and others. Those companies have gradually cut back operations in Venezuela over the years.
Schlumberger, based in Houston, is only the latest company to run into big trouble in Venezuela.
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Delta (DAL), GM (GM), Pepsi (PEP), General Mills (GIS), Colgate (CL), Bridgestone (BRDCY) and Mondelez (MDLZ), which makes Oreos, have pulled out or written down their operations in recent years as the crisis has worsened.
McDonald's (MCD) still has restaurants in Venezuela but it doesn't count any of the business in its worldwide earnings. It suspended sales of french fries and the Big Mac because of potato and bread shortages. Exxon Mobil (XOM) fought a 10-year legal battle with Venezuela and lost it last year.
United (UAL), Lufthansa, AeroMexico, Air Canada and Colombia's Avianca have all stopped flying to Venezuela. American still does, but it has significantly reduced flights. U.S. airlines say the Venezuelan government has frozen $3.8 billion of their profits, according to an industry group.
