Saturday, May 25, 2024

Venezuela plans to let private companies operate state oil fields | News Nicolas Maduro

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Venezuelan officials have met in recent months with small national oil field entrepreneurs to offer to let them operate fields owned by the state-owned company Petroleos de Venezuela (PDVSA) while pocketing part of the proceeds, six people told the current discussions at the Reuters news agency.

Interviews show that President Nicolas Maduro, facing a collapse in crude production and US sanctions aimed at ousting him, is seeking investment in Venezuela – a nation that belongs to the Organization of the Petroleum Exporting Countries ( OPEC) – offering even milder terms than a 2018 plan that echoed elements of the nationalist platform of the country’s oil industry.

It is not known whether any companies actually signed the contracts under discussion. Any attempt to open up to the private sector faces many hurdles, including mistrust of working with PDVSA after years of late payments and concerns about Washington’s sanctions.

So far, companies interested in the new offerings have been relatively small, including S&B Terra Marine Services, based near Lake Maracaibo in western Venezuela, and Arco Services, based in eastern Venezuela. Monagas, according to three of the people who spoke about the condition. anonymity.

Neither company responded to requests for comment, neither PDVSA nor Venezuela’s petroleum ministry.

The government recently adopted an “anti-blockade” law allowing the confidential signing of oil agreements, due to the risk of sanctions. In addition, members of the ruling Socialist Party – which recently took control of the National Assembly in a controversial vote – have pledged to reform laws to allow greater private participation in the oil industry.

“We aim to increase production to 1.5 million barrels [per day] with new production, financing and marketing mechanisms, ”Maduro said in an annual speech Tuesday night to the National Assembly, without providing details.

That would bring production back to 2018 levels after dropping to just 434,000 barrels per day (b / d) in November.

Vice President Delcy Rodriguez said in a public television interview on Wednesday that “various agreements” had been made for oil investments under the anti-blockade law, without providing details.

Diving excursion

The OPEC nation’s crude production has fallen to its lowest level in decades due to years of underinvestment and mismanagement, as well as U.S. sanctions. This decline has exacerbated a humanitarian crisis in which some five million people have emigrated.

“Since the government is closed to many channels, they want to delegate responsibility to private companies and justify this delegation with sanctions, blockade and humanitarian impact,” said one of the people.

Although details of the proposed arrangements are not available, two of the people said they differed from the “joint service agreements” signed with a handful of little-known companies in 2018, allowing them to take over the funding and l acquisition of equipment.

These companies, which were only paid if production increased, had little experience in the oil industry, people said.

The contracts currently under discussion, with experienced contractors from PDVSA, do not require any increase in production, the people said.

Another key difference is that the current proposals would allow private companies to sell raw or refined products themselves as compensation, three people said, adding that details were not yet clear. US sanctions would likely complicate efforts by private companies to export oil.

The government has also focused on fields owned only by PDVSA for the new deals, rather than its joint ventures with private companies, such as Chevron Corp and China National Petroleum Corp Ltd.

However, PDVSA recently informally granted its minority partners in joint ventures operational control of their fields.


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