Wright: More Reforms Needed for $100B Venezuela Oil Plan


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The Trump administration seeks to further liberalize 
Venezuela's oil sector, Energy Secretary Chris Wright said Friday (2/13) as the 
U.S. pivots from industry oversight to full-scale privatization and auctioning 
of the country's untapped reserves.

   During a three-day visit to Caracas, Wright discussed a $100-billion 
reconstruction plan that would move beyond the current maintenance-phase of 
Venezuelan oil adopted by the White House to active scouting of locations for 
new drilling operations. That would be in line with U.S. President Donald 
Trump's recent remarks that U.S. oil companies were "scouting it out and 
picking their locations" in Venezuela to bring back wealth for both nations.

   The U.S. Treasury has also issued two licenses that would allow global 
companies to negotiate contracts on investments in new energy operations in 
Venezuela, essentially greenlighting the groundwork for future block auctions.

   Venezuela's recent passing of laws to allow private companies to control 
production and pricing of oil was "a meaningful step in the right direction" 
after years of monopoly held by the state-owned PDVSA, Wright noted. The new 
regulations establish independent arbitration for contract disputes, a move 
intended to provide legal security for international firms eyeing a stake in a 
nation with the world's largest proven crude reserves.

   Yet to spur the kind of large investments needed to upscale the industry, 
Venezuela needs to undertake more reforms and provide clarity on the changes 
made, Wright said.

   On the White House's part, he said it was moving "as fast as it can" in 
assisting Chevron, the U.S. driller on the ground in Venezuela, to expand its 
production license.

   The Trump administration took charge of Venezuela's oil industry in January 
after capturing the country's leader Nicolas Maduro and installing his number 
two Delcy Rodriguez as interim president.

   It has since begun lifting sanctions on the country to facilitate the return 
of foreign oil operators. OPEC, in its monthly report issued Tuesday (2/11), 
estimated that Venezuela produced 830,000 bpd in January, down 87,000 from 
December.




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