California-based Pacific Coast Energy Company announced agreements worth about US$3.5 billion with state oil firm PDVSA on Wednesday, 7 October. Venezuela's acting president, Delcy Rodríguez, said the government was negotiating 44 more oil and gas agreements alongside 61 already signed. The company said it took over the Delta and Cabimas oil blocks, where production has begun at about 19,300 barrels a day.
Pacific Coast Energy aims to double output within six months and reach a peak of 150,000 to 160,000 barrels a day. The agreements bring private firms into Venezuela's oil production, though the government hasn't named the companies behind the 44 pending deals or disclosed their value. Those agreements aren't signed yet.
Oil Deals and Financing
At the opening of the 82nd annual assembly of Fedecámaras, Venezuela's main federation of business chambers, Rodríguez said the country expects about US$12 billion in public and private financing over two years. She said the money should reach large, medium and small firms, as well as entrepreneurs.
Rodríguez said the government had restored ties with the International Monetary Fund, the World Bank and the Inter-American Development Bank, while maintaining its relationship with CAF, the Latin American development bank. She gave no breakdown by lender or private bank. The announcement doesn't mean US$12 billion has been approved.
State broadcaster Venezolana de Televisión published video of Rodríguez's appearance. She said the 105 signed and pending agreements could create about 320,000 jobs within four years, TalCual reported. The government hasn't published a breakdown of the employment figure, which couldn't be independently checked.
Rodríguez also said oil production had grown 8% so far this year. The government hasn't released a list of the 44 pending contracts, and the production figure couldn't be independently checked.
Power, Taxes and Private Investment
Rodríguez promised tax reform to “harmonise” the tax burden, but gave no date. She said a reform of the electricity law would follow “in the coming days, weeks,” and no later than this year. The planned law would allow private companies to invest in power generation, transmission and distribution. The government hasn't published the reform's text.
Venezuela has faced protests over blackouts that can exceed 10 hours, TalCual reported. Rodríguez blamed twin earthquakes on 24 June for damaging 800 megawatts of capacity and said 600 megawatts had been restored. She said agreements with General Electric and the company INSA would add 7,400 megawatts over time.
The Fedecámaras assembly continued on Friday, 9 October. The federation had asked the government to address public services, credit and taxes, El Nacional reported. Rodríguez also announced that the Christmas season would officially begin on 1 November, saying the early start would boost retail activity in the last quarter.
Currency and Sanctions
Rodríguez rejected calls from some business leaders to make the U.S. dollar Venezuela's official currency. “It is not dollarization that will solve Venezuela's problem,” she said, according to Efecto Cocuyo. She said the gap between official and parallel exchange rates fell from 65.7% in January to 11.7% in October, and said she wanted to narrow it further “with international banking, with US banking,” TalCual reported.
U.S. energy deals remain subject to U.S. sanctions rules. The Treasury's Office of Foreign Assets Control, which enforces those rules, last amended its Venezuela general licences on Monday, 28 September. The U.S. is the largest shareholder in the IMF and the World Bank, and new lending to Caracas would pass through boards where Washington holds the biggest vote.
Rodríguez said Nicolás Maduro was captured in January. The report said Venezuela's energy opening after his capture was continuing. Rodríguez was Maduro's vice president and has led Venezuela as acting president since his capture by U.S. forces, the article said.