OIL The Government is considering outsourcing exploration and production programs to large corporations.
José Suárez-Núñez
The Minister of Energy and Mines, Rafael Ramírez, confirmed yesterday a 30% cut in the investment plan and a 40% cut in the operational plan of the global budget for Petróleos de Venezuela for 2003. This spending reduction amounts to 5.7 trillion bolivars, leaving 4.3 trillion available for investments and operations this year.
The budget for Petróleos de Venezuela, approved on December 30 in Miraflores, totals 10 trillion bolivars, according to the Official Gazette published on January 3, 2004.
Surprise
Business sectors reacted with anger and surprise when Minister Ramírez announced that they will seek private or third-party companies to undertake projects.
They noted that these are likely to be international firms, as the oil industry owes domestic companies around 5 billion dollars since last September.
Experts indicated that the Ministry of Energy and Mines and Pdvsa are assessing the potential outsourcing of major exploration and production programs to large corporations.
Foreign Firms
At the end of last year, it emerged that the multinational company Schlumberger was considering leaving the country due to the difficult oil situation and the government’s changing plans. Now, another version circulates, claiming the company is evaluating a government offer, along with other foreign firms, for an aggressive production campaign.
The government’s aim is to recover from past failures in establishing solid production levels.
However, other sources warned that Chinese, Nigerian, and Russian firms could join these plans to boost production at any cost. A significant contribution has been the 400,000 barrels per day extracted from operational agreement fields.
Miguel Bocco, former president of the Oil Chamber, stated that this is one of the worst moments for the oil industry.
He added that it is illogical for Pdvsa to be cutting investment projects by 30% during such a dire economic situation when it is crucial to boost production to the highest levels at this inopportune moment.
COMPANIES
Crespos Done
The government has criticized outsourcing projects, driving away national investments and consortiums.
Now it projects that private firms will be the ones to help cut investments, but only international companies have the ability to do so, leaving national firms with their hands tied. Besides the colossal debts, it also seems that the government is ready to lower its priority interest in exploiting the Gulf of Paria, which would mean a change in the Hydrocarbons Law.
Meanwhile, national companies are burdened with debts, unmet promises, and decrees favoring national capital formation. They were offered projects, but demanded debt payments, guaranteed gasoline, site access security, and negotiations regarding the effects of exchange control.