CERAWEEK - Venezuela's opposition drafts an energy reform to increase foreign pressure on Maduro
According to sources, the Venezuelan opposition has developed a proposal that allows international companies to participate in energy reforms. This is a bid to gain support from Big Oil, and President Donald Trump’s administration.
This month, Trump's administration canceled an important license for U.S. Oil Major Chevron to work in Venezuela citing President Nicolas Maduro’s lack of electoral Reforms. The opposition leaders took advantage of the situation to increase pressure on Maduro.
The proposed changes to Venezuela's hydrocarbon laws are more attractive than previous plans put forward by the opposition, including in recent years. They may also be attractive to oil companies from around the world, such as those in the U.S.
The plan includes reducing the size of Venezuela's state oil company PDVSA and offering Venezuelan oil fields, refineries, and midstream assets for foreign companies. PDVSA stakes will be available for private bids.
The proposal states that "Venezuela opens its energy sector to investors around the world and offers unprecedented investment opportunities, as well as a clear framework based on rules for the private sector's leadership."
The U.S., and other Western nations disputed the official result that Maduro had won Venezuela's elections last year. This was his second reelection. The opposition published the voting results showing Edmundo Gonzalez as the winner.
A delegation of opposition leaders attended the CERAWeek Conference in Houston.
According to an overview of the document, it outlines plans to increase oil production above 3 million barrels a day (bpd), which has not been seen for 15 years.
Venezuelan crude production averaged 920,000 barrels per day last year.
The new proposal allows existing PDVSA partners to switch to more attractive terms of contract, including a smaller take for the Government.
The proposal states that international standards for investment protection will be incorporated into Venezuela's legal framework.
In a Telegram post, Foreign Minister Yvan Yvan Gil called the opposition's proposal a "desperate effort to gift our sovereignty to foreign interests". He added that the opposition promoted policies for the benefit of "their allies abroad".
Maduro announced on Tuesday night, state television, that Venezuela was open to foreign investment in the oil, gas, and petrochemical industries.
The nationalization of the oil industry began two decades ago, under former president Hugo Chavez. Debt defaults and lawsuits followed, with some still ongoing. Citgo Petroleum, a U.S. refiner based in Venezuela, is the target of many creditors.
Venezuela has the largest reserves of crude oil and natural gas in Latin America, but little investment has been made due to political instability, nationalist policies and U.S. sanction.
Long have the opposition complained about electoral fraud. Venezuela's longstanding political crisis is not being resolved quickly. Reporting by Marianna Pararaga Editing and production by Marguerita Gregorio and David Gregorio
(source: Reuters)
