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Venezuela seems to be changing tactics when it comes to managing its oil resources. PDVSA is considering a major industry reform that would increase private company activities in its troubled oil industry, according to a document seen by Reuters.
This would be a far cry from its current socialist agenda that allowed only a limited role of private oil companies in the country.
The document, according to Reuters, is dated March 2020, and calls on a special committee within PDVSA’s planning division to restructure the industry in a way that would let private companies operate oilfields and refineries without the intervention of PDVSA.
The plan also calls on PDVSA to reduce stakes in several of its oilfields.
The plan was suggested last month, but came to light the same week that the United States told Chevron and Halliburton to wind down their operations in Venezuela as the waivers each were enjoying are set to expire.
Venezuela’s oil industry has long been floundering as years of mismanagement, underinvestment, and US sanctions have left oil infrastructure in disrepair, and crude customers in short number. As such, the country—enjoying the world’s largest oil reserves--is in a state of crisis, where it has found itself stuck well before the coronavirus pandemic came onto the scene.
Venezuela’s oil production has fallen by more than one million barrels per day, and no longer holds the same oil-market sway as it did decades ago—something Venezuela would like to rectify.
“Given this situation, to achieve the objective of increasing production and returning Venezuela to the leading role in the oil world, it is necessary and urgent to restructure Petroleos de Venezuela,” the document read in part.
The document also came a day after leader Nicolas Maduro replaced Manuel Quevedo with a new PDVSA leader, Asdrubal Chavez, who is Hugo Chavez’s cousin.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.