After Collapse of Venezuela’s State Oil Company, Maduro Weighs Privatization

Maduro will eventually push for a change in the Hydrocarbons Law to allow foreign companies collaborating with PDVSA to exploit Venezuela’s oil fields

4,181
Allowing joint ventures to invest in Venezuela “would be a break from the statist energy policy that the Bolivarian Revolution has maintained in Venezuela” (Twitter)

Spanish – After socialism practically destroyed Venezuela’s oil industry, Nicolas Maduro seems to be analyzing how to privatize the sector and allow joint-ventures to directly exploit the oil fields.

A BBC Mundo report revealed that sources in the oil sector in Venezuela are betting that Maduro “will end up promoting a change in the Hydrocarbon Law that will allow foreign companies that collaborate with PDVSA to exploit the oil fields.”

It is not the first time that this news has come up about the possibility of somehow privatizing the oil fields in Venezuela. On 6th December, the Reuters news agency revealed that both the regime and the opposition “are considering handing over field operations to PDVSA partners”.

So far there is no official information on this matter. Meanwhile, Jose Ignacio Hernandez, Special Prosecutor of the interim government of Juan Guaido, described this action as a possible “de facto privatization, a sign of the collapse of the state.”

The Reuters report notes that the amendment to the law is being discussed with joint ventures such as Chevron, Russia’s Rosneft, and China’s state-owned CNPC.

The talks appear to be taking place within the framework of the Boston Group, where officials close to Maduro, opponents, and economists critical of the regime meet to discuss economics and politics.

The initiative also arises at a time international sanctions have “strangled” the tyranny and forced it to make some areas of the economy, such as price and exchange control, more flexible.

The BBC Mundo report points out that allowing joint ventures to invest in Venezuela “would mean breaking with the statist energy policy that the Bolivarian Revolution has maintained in Venezuela since the time of the late President Hugo Chavez.”

Is production increasing?

The crude oil production that had bottomed out in Venezuela in the middle of a production of 600 thousand barrels per day has increased recently but not thanks to PDVSA but to the partner companies.

According to Reuters, oil production averaged 926,000 barrels per day in November, which is 200,000 barrels more than in October. That is a 20% increase.

What has happened is that PDVSA delivered production, sales, and collections to the partner companies, even though they were a minority in the partnership scheme. Repsol, Rosneft, Chevron, and Gazprom manage the whole process according to Al Navío.

Everything coincides: Maduro will hand over operations to mixed companies and the Venezuelan opposition in the National Assembly will discuss a new Hydrocarbons Law. According to Konzapata, the new regulations would allow multinationals to obtain the majority of mixed companies.

Socialism “killed the dream of nationalization”

Jose Toro Hardy, who until 1999 was a member of the board of directors of the Venezuelan state oil company. An economist who, together with a team of specialists, managed to position the company as the second best in the world, had already pointed out to the PanAm Post that it was the regime that “killed the dream of nationalization”.

“If we want to revive the oil industry, which will always be possible because we still have underground oil reserves, it will have to be based on private investment. That’s why I say this regime killed the dream of nationalization,” he said.

Subscribe free to our daily newsletter
Sign up here to get the latest news, updates and special reports delivered directly to your inbox.
You can unsubscribe at any time