The Nicolas Maduro regime has proposed giving majority shares and control of its oil industry to international corporations after decades of state control.
According to an article published by Bloomberg on Monday, Maduro’s representatives have reportedly held talks with Russia’s Rosneft PJSC, Repsol SA of Spain and Italy’s Eni SpA. Washington sanctions, which have barred any US company from doing business with the Maduro government without a waiver, are also discouraging non-US companies from dealing with the embattled Venezuelan regime.
“The idea is to allow them to take over government-controlled oil properties and restructure some debt of state oil company Petroleos de Venezuela SA in exchange for assets, according to people with knowledge of the matter,” the article stated.
The report said that while the proposal is in its early stages and faces major obstacles, it could reportedly offer a balm to the South American country’s disintegrating oil industry. The report said that for the proposal to be viable, the Venezuelan laws will have to be changed, for which the cooperation of opposition leader Juan Guaido is needed.
The report said PDVSA produces a record-low of 700,000 barrels per day, down from 3.5 million barrels per day despite sitting on the world’s largest known reserves. “Its finances are in tatters: The central bank’s hard-currency reserves have plunged to the lowest in three decades while the government’s cash holdings total less than $1 billion,” the Bloomberg report said.
Bloomberg said oil has long been a resource “so precious that stringent restrictions on foreign ownership and involvement are laid out in the constitution. But the country’s crisis, a result of titanic mismanagement, plunging oil prices, corruption and foreign pressure, has caused Maduro to bend many socialist principles recently.”
