Venezuela’s acting president, Delcy Rodríguez, said the government was negotiating 44 additional oil and gas agreements as it sought about US$12 billion in public and private financing and reopened ties with international lenders. The announcement ties the country’s energy expansion to foreign companies, outside capital and institutions where Washington holds the biggest vote.
Deals Without Public Details
Rodríguez spoke on Thursday, 8 October, at the opening of the 82nd annual assembly of Fedecámaras, Venezuela’s main federation of business chambers, in Caracas. The meeting was scheduled for 8 and 9 October at the Eurobuilding hotel.
The government had already signed 61 oil and gas agreements, she said, bringing the signed and pending total to 105. Officials haven’t named the companies behind the 44 pending deals, disclosed their value or published the contracts. Those agreements have not been signed simply because they were announced.
Rodríguez said the 105 agreements could create about 320,000 jobs within four years. She also said oil production had grown 8% so far this year. Neither figure came with a published breakdown, and both remain government figures that independent observers couldn’t verify.
A day earlier, California-based Pacific Coast Energy Company announced agreements worth about US$3.5 billion with state oil firm PDVSA, TalCual reported. The company said it took over the Delta and Cabimas oil blocks, with output starting at about 19,300 barrels a day. It aims to double output within six months and reach a peak of 150,000 to 160,000 barrels a day.
Foreign Finance and U.S. Leverage
Rodríguez said Venezuela 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 said the expected US$12 billion in public and private financing over two years should reach large, medium and small firms, as well as entrepreneurs. She provided no breakdown by lender or private bank, and the funding hasn’t been approved.
The United States is the largest shareholder in the IMF and the World Bank. New lending to Caracas would pass through boards where Washington holds the biggest vote. Venezuela’s energy agreements with U.S. companies remain subject to U.S. sanctions rules; the Treasury’s Office of Foreign Assets Control last amended its Venezuela general licences on Monday, 28 September.
Power Reform and Public Services
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.
She promised a 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 let private companies invest in power generation, transmission and distribution. The government hasn’t published the reform 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 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. The announcement included no demographic figures or assessment of effects on Venezuela’s population.