21:28 GMT13 June 2021
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    It is unclear, however, how the state oil company plans to raise such a vast sum of money from investors while remaining under sanctions from the US which affect both funding and oil sales.

    Venezuelan state-owned oil giant Petroleos de Venezuela SA (PDVSA) believes an investment of $77.6 billion can set the country's oil and gas industry back on its feet, according to an internal document obtained by Reuters. The paper titled "Investment Opportunities", reportedly drafted in February 2021 not long after new US President Joe Biden was inaugurated, envisages a total overhaul of the country's gas and oil infrastructure, oilfields, refineries and other facilities to increase crude output to several million barrels per day instead of the present 578,000.

    For that, the PDVSA requires not only government, but also foreign investments. More than $69 billion is needed to bring the decaying oil and gas production infrastructure up to date, the company's document reportedly estimates. Another $7.65 billion is reportedly needed to revive pipelines and other auxiliary infrastructure, which has been in a dire state for years because of underinvestment and partly external economic pressure from the US.

    Reuters says that according to the PDVSA report, at least $58 billion is needed to upgrade the country's energy industry enough to return to pre-Chaves production levels of around 3.4 million barrels per day last seen in 1997. In total, PDVSA reportedly outlined 152 "opportunities" worth around $77.6 billion to invest in to "restore reliability, safety and quality of operations" and "fully supply the domestic market with fuels".

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    Despite being in dire need of cash to bring these ambitious plans to life, PDVSA reportedly does not suggest reversing the country's long-time policy of keeping its oil and gas fields nationalised in the document. Instead of offering investors a share in the joint venture, the Venezuelan oil giant reportedly offers to build relations on production services agreements or ASPs.

    Under them, investors would fully fund operations in the oil and gas fields and would receive a portion of the resulting free cashflow in return. Still, such a scheme would mark a step back from the approach to working with the private sector preached by the past two governments.

    It is unclear, however, how PDVSA, which refused to comment on the document's authenticity, expects to attract financing and pay back the investors. Venezuela and PDVSA are under heavy US economic sanctions, which limit both foreign investments in the oil industry and the country's ability to sell crude. According to media reports, however, Caracas has found ways of keeping the oil trade with China alive despite sanctions.

    It is possible that the report's authors prepared the document in case President Joe Biden reverses Trump's 2019 decision to impose economic measures in an attempt to oust Venezuelan President Nicolas Maduro, whom Washington accused of rigging his last re-election. The sanctions further impeded PDVSA's ability to upgrade outdated equipment needed to extract heavy blends of oil and refine it into gasoline, deepening the economic crisis and triggering fuel shortages in Venezuela.

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    investments, oil, Venezuela, PDVSA
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