In the midst of a scenario marked by signs of openness and evaluation of opportunities, international oil companies are holding conversations with authorities and legal advisors to identify which reforms would make new investments in Venezuela, one of the world’s largest crude oil reserves, more efficient.
Legal adjustments and operational control
One of the key points of interest for foreign companies is the possibility of having greater autonomy to directly commercialize their share of production in joint projects. According to Reuters reports, international players would be willing to operate under the joint venture model, as long as they can have operational control over their share of crude and direct access to terminals and export infrastructure.
This proposal would not alter PDVSA’s majority shareholder status, but it would imply adjustments to the current regulatory framework, which establishes that the state-owned company must concentrate the sale of production and distribute revenues through joint accounts.
Impact of restrictions
Since the imposition of sanctions in 2019, the financial flows associated with oil oil production have been significantly affected. This has resulted in the accumulation of debts with companies such as Chevron, ENI and Repsol, which has generated caution in the analysis of new investment opportunities in the country.
For the companies concerned, one of the main obstacles has been the difficulty of ensuring that their investments translate into sustainable and protected returns. In that sense, the possibility of regaining control over their exports would allow for improved financial and operational planning, an aspect considered key to any new disbursement.
Tax changes under debate
According to industry sources, proposals are being evaluated that seek to maintain traditional mechanisms such as royalties and income tax, but eliminating tax surcharges introduced in 2021. The objective would be to make the country’s participation more competitive with other oil destinations in the region.
In addition, mechanisms have been proposed to guarantee faster payments to members, reducing exposure to operating and financial risk.
Interest in stability and efficiency
Although discussions are in the early stages, industry observers note that there is growing agreement among the various stakeholders on the need to create a more predictable, transparent and operational environment. This would include not only regulatory changes, but also better practices in contracting, logistics and information exchange.
For Venezuela, a controlled and clear opening to foreign investment could mean the entry of capital, technology and operational capabilities to help increase production.
Source: Reuters