Venezuela is projecting revenues of close to US$ 5 billion in the coming months from oil sales, according to statements made by the U.S. Secretary of Energy, Chris Wrightduring an official visit to Caracas. The figure is in addition to more than one billion dollars already invoiced recently, consolidating a key recovery for the country’s energy industry.
Trade agreements strengthen crude oil flow
The commercialization of Venezuelan oil is being managed by large oil companies such as Vitol and Trafigura, who are leading sales operations in international markets. These actions, structured through short-term agreements, allow revenues to return directly to Venezuela through previously established financial compensation mechanisms.
According to Wright, $500 million has already been channeled as part of the first transfers, and the total amount is expected to rise rapidly as new shipments and contracts move forward.
Growth in energy production
During his visit to Caracas, Secretary Wright affirmed that Venezuela could register a “dramatic increase” in oil, natural gas and electricity production this year. The estimate is based on recent reforms and technical improvements in the extraction fields, as well as on a better perspective of international cooperation.
The official also valued positively the recent reform of the Venezuelan oil law, describing it as “a step in the right direction”. However, he clarified that it still does not offer enough legal clarity to attract large foreign investment flows.
Barriers to attracting private capital persist
From the private sector, some voices remain cautious. Darren Woods, CEO of ExxonMobil, commented in a meeting with U.S. officials that current conditions “do not allow for sound investments” due to the fragility of the current legal framework in Venezuela.
The opinion coincides with the analysis of several energy sector executives, who warn that, although the projected revenues are a relief for the country’s finances, there is still a long way to go to generate a competitive and secure environment for investors.
A new outlook for the oil industry
The expected flow of US$5 billion marks a turning point in Venezuelan public finances and represents a window of opportunity to promote energy reactivation projects, infrastructure recovery and the expansion of logistical capacities.
In the midst of a supply-sensitive global market, Venezuela is once again on the radar as a strategic crude oil supplier, with the potential to scale up its production if commercial and legal conditions continue to evolve positively.
Source: OilPrice