Caracas, Venezuela – Venezuela Acting President Delcy Rodriguez Venezuela heralded the lucrative long-term opportunities in its resource-rich country during a Saudi-backed investment summit on Wednesday, providing a window into how Venezuela’s government is trying to attract investors to its oil sector.
In his speech to the Miami Summit from Venezuela, Rodriguez presented a reformed industry, one that has already achieved success Open to private capital, international arbitration and audit In less than three months since her predecessor was captured by the US military, Nicolas MaduroThe White House began implementing a phased plan to change the course of the troubled country. She did not mention Maduro, focusing instead on reassuring potential investors that Venezuela represents a safe investment, thanks in part to the recent reform of its oil industry.
She expects the country to see double-digit economic growth this year and the next, creating conditions “in which investors know that, regardless of political changes or restrictive conditions, there is safety, and that Venezuela has laws that allow the safe return of their investments.”
“We are in the process of stabilizing and implementing the necessary reforms to provide a productive environment and attract investments that will diversify the engines of the Venezuelan economy,” she said during a presentation delivered entirely in Spanish.
Venezuela sits on the world’s largest oil reserves and uses them to power what was once the strongest economy in Latin America. But corruption, mismanagement and US economic sanctions have led to a steady decline in production from the 3.5 million barrels per day pumped in 1999, when Maduro’s mentor took power. Hugo ChavezIt took capacity below 400,000 barrels per day in 2020.
In 2019, the US Treasury Department under the first Trump administration locked Venezuela out of global oil markets when it imposed sanctions on Venezuela. State-owned Petroleos de Venezuela SA, or PDVSA, As part of the Maduro government’s policy of punishing corruption. This forced the government to sell the remainder of its oil production at a discount – about 40% below market prices – to buyers such as China. Venezuela even started Accept payments in Russian rublesOr barter goods or cryptocurrencies.
The country currently produces about one million barrels per day.
On Wednesday, Rodriguez praised Venezuela’s low production costs and its willingness to negotiate.
She said: “When we look at a barrel of oil, and the cost of producing it, 64% of that barrel has room to negotiate with the investor in terms of royalty reductions, income tax reductions, and most importantly, the profits that the investor receives.” “If there was a large investment, obviously the return would be 64% higher.”
Rodriguez was sworn in after Maduro and his wife were arrested on January 3 in the Venezuelan capital, Caracas, and transferred to New York to face drug trafficking charges. Both have pleaded not guilty He is expected to appear in court Thursday.
After taking office, Rodriguez, under pressure from the Trump administration, quickly moved to… Reform oil industry regulations. A new law now gives private companies control over oil production and sales, ending PDVSA’s monopoly on these activities as well as pricing. It also allows for independent arbitration of disputes, eliminating the jurisdiction to settle disputes only in Venezuelan courts, which It is controlled By the ruling party.
In return, the US Treasury eased the sanctions. Last week, it issued a broad mandate allowing PDVSA to sell Venezuelan oil directly to U.S. companies and on global markets, a massive shift after largely barring dealings with the Venezuelan government and oil sector for years.
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