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Venezuela’s Guaido readies to open up oil industry after years of nationalisation

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To Guaido, the self-declared interim president seeking to oust President Nicolas Maduro, the proposal is vital to reverse the collapse of the OPEC-member nation’s oil industry.

Oil provides 90 per of Venezuela’s export revenue, and such a move could win Guaido support among foreign energy companies to help finance a desperately-needed rebuilding after crude production has fallen to a seven-decade low.

“We need to change the current framework … we need to open up the oil industry to private investment,” said Ricardo Hausmann, Guaido’s delegate to the Inter-American Development Bank.

Speaking at an energy conference in Houston, Hausmann said that PDVSA’s role had to be limited due to its operational and financial weakness.

Neither PDVSA nor the Information Ministry replied to a request for comment.

The proposal could provide ammunition for Maduro’s claims that Guaido is a puppet for foreign interests, but is unlikely to damage widespread support for the opposition leader with many Venezuelans tired of years of shortages and hyperinflation.

However, the plan’s impact will remain symbolic as long as Maduro remains in power. Despite being disavowed by 50 governments who recognize Guaido as the country’s legitimate leader, Maduro continues to control Venezuela’s military and its oilfields.

Under the proposal, which is expected to be released and discussed at Venezuela’s National Assembly in coming days, private firms could choose to run the day-to-day operations of Venezuelan oilfields, a sharp departure from the Chavez era in which foreign companies could only hold minority stakes and were not granted operational control.

PDVSA would continue as a main player but some of its assets would be transferred and auctioned off by an independent regulator, in a manner similar to Mexico’s energy reforms, which ended a 75-year monopoly.

“The Venezuelan oil industry has collapsed after years of arbitrary policies that turned PDVSA and its subsidiaries into political tools serving the Socialist model,” according to the preamble to the law.

Guaido’s team is proposing a variety of exploration and production contracts to allow private companies for the first time in decades to operate oilfields individually and in partnership with PDVSA.

Private companies could also apply to operate oil refineries and retail service stations under the draft proposal.

U.S. National Security Adviser John Bolton, who has urged Maduro to resign, had called for opening the energy industry to foreign operators.

“It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela,” he told Fox News in late January.

The new contracts would be awarded by a new regulator, named the National Hydrocarbon Agency, which would organise a “round zero” and let PDVSA pick its preferred oilfields.

“All hydrocarbon reservoirs can be part of an auction to be decided by Venezuela’s Hydrocarbon Agency,” the draft says.

Once the law is approved, there would be additional legislation to come for regulating specific aspects of the oil business, according to the draft.

Venezuela’s current energy law, the backbone of an economy dependent on oil revenue, was approved by Chavez in 2001 under a legislative power granted to him by the congress, and was later revised to increase taxation and the government’s control over the industry.

More than a decade ago, Chavez used the law to force foreign partners to enter into joint ventures controlled by PDVSA, following a lengthy oil industry strike against his government.

Chavez began a wave of nationalizations that led ConocoPhillips and Exxon Mobil Corp to leave the country and later win billions of dollars in international arbitration claims.

The new proposed law would impose a flexible royalty rate with a minimum of 16.67 per cent and maximum of 30 per cent, depending on oil prices, removing shadow taxes that increase payments.

At present, companies including Chevron Corp are compensated through dividends paid by PDVSA.

“It would be a step backwards, it would not live up to what Chavez left the workers, which is a company that’s free, a nationalized company,” said Luis Rojas, head of an oil workers union who works at a heavy oil project in the east of the country.

Foreign

France denies harbouring Venezuelan opposition leader Guaido in Caracas

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France denied on Friday that Venezuelan opposition leader Juan Guaido had taken refuge at any of its diplomatic sites in Caracas after the Venezuelan foreign minister said he was hiding in the French Embassy.

“Mr Juan Guaido is not at the French residence in Caracas.

“We have repeatedly confirmed this to the Venezuelan authorities,” Foreign Ministry spokeswoman Agnes von der Muhll said in a statement.

A French diplomatic source clarified that Guaido was not in any French sites in the South American country.

Venezuelan Foreign Minister Jorge Arreaza told Union Radio on Thursday that Guaido was in the French embassy and also accused Spain of harbouring Leopoldo Lopez, another opponent of the government.

“It is shameful for Spanish diplomacy. It is shameful for the diplomacy of France what has happened, and they will pay the price very, very soon,” Arreaza said.

France in May summoned Venezuela’s envoy over accusations that President Nicolas Maduro’s government had been harassing its embassy in Caracas, including by cutting water and electricity to the ambassador’s residence.

France is among dozens of countries that do not recognise Maduro’s disputed 2018 re-election and consider Guaido to be Venezuela’s rightful president.

Maduro has previously accused French Ambassador Romain Nadal of meddling in Venezuela’s internal affairs.

Von der Muhll, the French Foreign Ministry spokeswoman, added: “Only a democratic path with free, transparent, and credible elections will enable it (political crisis) to be resolved in the long-term and put an end to the suffering of the Venezuelan people.”

Edited By: Emmanuel Yashim (NAN)

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Venezuelan foreign minister confirms Guaido hiding in French Embassy, extradition expected

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Venezuelan Foreign Minister Jorge Arreaza confirmed on Friday, reports that opposition leader Juan Guaido is hiding at the French embassy in Caracas, saying that the Latin American country is awaiting his extradition.

Arreaza’s remarks come after President Nicolas Maduro hinted that Guaido was “hiding from justice,” sparking talks that the latter might be sheltering at a diplomatic location.

“We hope that these governments (of Spain, France) will act properly, comply with the legislation of the hosting country — in this case, Venezuela — and transfer fugitives from justice into the hands of Venezuelan justice,” Arreaza said in an interview to Union Radio.

The foreign minister stressed that Leopoldo Lopez, another leading opposition figure, had been hiding at the Spanish embassy for more than a year.

Arreaza said that Lopez supervised Guaido and masterminded Operation Gideon, which was aimed at overthrowing Maduro. 

Edited By: Emmanuel Yashim (NAN)

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Iran ready to send more fuel to Venezuela: spokesman

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Iran is ready to send more fuel shipments to Venezuela if there is a request, Iranian Foreign Ministry spokesman Abbas Mousavi said on Monday.

Mousavi slammed United States attempts to block Iran’s trade with other countries, saying that “if Venezuela makes a new request for (fuel) delivery, more shipments will be sent.”

“It is Iran’s natural right to defend its (economic) interests even in faraway places,” Mousavi said in his weekly press conference.

Last months, five Iranian oil fuel tankers arrived at Venezuela shores.

Washington has threatened to take action against the Venezuela-bound fuel tankers, including blacklisting the crew and the tankers.

(XINHUA)

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Iranian fuel reaches Venezuelan stations as prices set to rise

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Fuel shipped from Iran began arriving at Venezuela’s gasoline stations on Saturday, just hours before President Nicolas Maduro announced higher prices at the pump that are set to end more than two decades of almost-free gasoline.

As authorities in the country with the world’s cheapest gasoline got ready to expand retail sales under a system combining subsidies and international prices, the fifth cargo of an Iranian flotilla approached the Caribbean Sea and is expected to reach Venezuelan waters on Sunday, according to Refinitiv Eikon.

Of 1,800 stations in Venezuela, about 240 have remained working since Maduro announced coronavirus-related lockdown measures in March, which included restrictions on fuel sales due to very low inventories.

More than 1,500 stations nationwide are expected to work in the coming days under the new system.

The new system includes monthly quotas for vehicles and motorcycles, automated sales and monitoring equipment.

Despite the price increases, it will cost about $1 to fill a whole tank of a vehicle under the subsidy.

After reaching the quotas, drivers will have to pay internationally indexed prices.

The remaining 200 stations will be supplied by independent companies, so drivers buying at those sites will be charged $0.50 per litre of gasoline and will have to pay in foreign currency.

Lines of drivers began forming at stations on Saturday in cities including Maracay, Valencia and Caracas in anticipation of the gasoline distribution.

Gasoline has been heavily subsidised in Venezuela, which, coupled with hyperinflation in recent years, has made it almost free, but acute scarcity has recently encouraged a black market that has forced people to pay at least $2 per litre.

Venezuela’s refineries, which can produce more than 1.3 million barrels per day (bpd) of fuel, have worked at less than 20 per cent of their capacity in 2020 mainly due to power outages and lack of spare parts.

As the U.S. sanctions imposed on Venezuelan state oil company PDVSA have also limited the sources and types of products Venezuela can import, Maduro’s socialist administration this year turned to Iran for refining parts and fuel.

The supply has been criticised by the U.S. as both nations are under sanctions.

“Venezuela has the right to buy in the world whatever it wants to buy,’’ Maduro said.

Fortunately, Venezuela has more friends than what people can imagine.’’

Washington has warned governments, seaports, shipping firms and insurers that they could face sanctions if they aid the Iranian supply, the U.S. special envoy for Venezuela, Elliott Abrams, said on Friday.

Venezuela’s Foreign Minister, Jorge Arreaza, said his government will use Abrams’ comments as proof in an international case against sanctions.

AIB

Edited By: Abdulfatah Babatunde (NAN)

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Venezuela envoy says fuel deal symbol of solidarity with Iran

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Venezuela’s Ambassador to Iran Carlos Antonio Alcala Cordones on Wednesday said that the shipment of fuel from Iran to his country is a symbol of solidarity between the two nations amid U.S. sanctions.

The arrival of Iranian fuel tankers in Venezuela “signifies the courage of two nations which have not given in to the pressures,” Cordones told Tasnim news agency.

He also praised the two sides for “favoring fair trade and building bilateral ties on the basis of mutual trust and friendship.”

Iran’s fuel export to Venezuela, despite the U.S. threats, has opened a new chapter in trade exchanges “in defiance of the U.S. government’s bullying, unilateral and extraterritorial policies,” he said.

Five Iranian-flagged vessels left the southern ports of the country in mid-March to the Caribbean shores.

According to the recent reports, three of the tankers have docked at the ports of Venezuela.

(XINHUA)

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Spotlight: Iran’s tankers’ cross into Venezuela waters “defies” U.S. sanctions: Iranian expert

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An Iranian expert says the arrival of Iran’s fuel tankers to the Venezuelan shores has defied U.S. sanction pressures against Tehran and Caracas.

The deal between Iran and Venezuela which came amid unprecedented U.S. sanctions on both states is primarily a “humiliation’ of U.S. policies, Foad Izadi, a professor at the Faculty of World Studies of the University of Tehran, said in an interview on Sunday.

On Sunday, the first vessel of Iranian five-tanker flotilla loaded with gasoline crossed into the Venezuelan territorial waters, escorted by the the Venezuelan navy. On Monday, two other tankers entered the Caribbean Sea and are heading to the Latin American country’s refinery ports.

Squeezed under economic pressures, both Iran and Venezuela struggle to evade the impacts of embargos by the administration of U.S. President Donald Trump.

The Islamic republic has a surplus of oil and gasoline, due to a significant drop in its exports pursuant to the sanctions and global economic setback caused by novel coronavirus pandemic. Meanwhile, Venezuela is in dire need of fuel because of its aged refinery facilities and inefficient energy management, which has made it rely on its imports.

Under these circumstances, Tehran and Caracas made a “win-win deal,” according to Izadi, at the end of last year, and the Iranian-flagged vessels left the southern ports of the country in mid-March to the Caribbean shores.

Last week, the White House announced that President Nicolas Maduro was using gold from central bank reserves to pay Iran, and the United States was considering measures it could take in response to Iran’s shipment of fuel to crisis-stricken Venezuela.

However, Iranians warned the United States against any move which may cause trouble for the Venezuela-bound Iranian fuel vessels.

President Hassan Rouhani said on Thursday that “if Americans create problems for our oil tankers in the Caribbean waters or in other parts of the world, we will reciprocally create problems for them.”

In the meantime, Venezuela’s Defense Minister Vladimir Padrino Lopez said the naval forces of the country would escort the Iranian tankers “to welcome them … and their solidarity” with Venezuela amid the U.S. sanctions.

Izadi said that “the successful measure by Iran (to supply its petrol to Venezuela) would ultimately result in the failure of U.S. sanction mechanism.”

“This also shows that the U.S. ‘maximum pressure campaign’ has been seriously challenged by the Islamic republic,” he said, adding that Tehran could maintain this “pragmatic win-win” policy.

Iran’s “successful” move will serve as an example for other countries who are under the duress of the United States, he added.

(XINHUA)

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Iran warns U.S. against causing trouble for Iran’s Venezuela-bound fuel vessels

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Iranian President Hassan Rouhani on Saturday warned the United States against causing trouble for the Venezuela-bound Iranian fuel vessels, official IRNA news agency reported.

“If the United States causes any problem for our oil tankers in the Caribbean Sea or any other parts of the world, it will run into trouble reciprocally,” the Iranian president said in a telephone conversation with Qatari Emir Sheikh Tamim bin Hamad Al Thani.

While highlighting Iran’s right to defend its national interests, Rouhani said his country will never be the initiator of any conflict with the United States.

He expressed the hope that “the Americans would not make a mistake” concerning the Iranian vessels.

The White House announced last week that the United States was considering measures it could take in response to Iran’s shipment of fuel to crisis-stricken Venezuela.

(XINHUA)

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Iran warns U.S. off threats against Iranian Venezuela-bound fuel tankers

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The Iranian defense minister on Wednesday warned the United States off any threats against the Iranian oil tankers carrying fuel to Venezuela.

Any threats for the tankers will trigger Iran’s harsh response, Amir Hatami was quoted as saying by official IRNA news agency.

Causing any insecurity to the oil tankers and maritime trade routes is in violation of the international law and will draw reaction of international institutions and countries, said Hatami.

“Our policy is also clear, and we won’t tolerate any disturbance for our tankers,” he noted.

Ali Rabiee, spokesman for Iran’s government, said on Monday that Iran was ready for the worst-case scenario over U.S. threats against the shipment of Iranian fuel to Venezuela.

The remarks by the Iranian officials came after the White House announced last week that the United States was considering measures it could take in response to Iran’s shipment of fuel to crisis-stricken Venezuela.

(XINHUA)

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Iran says ready for worst-case scenario amid U.S. threats over fuel shipment to Venezuela

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Iran is ready for the worst-case scenario over U.S. threats concerning the shipment of Iranian fuel to Venezuela, spokesman for Iran’s government Ali Rabiee said on Monday.

Iran and Venezuela interact within the framework of healthy and regular business exchanges and their relations do not concern any other country, Rabiee said during his weekly press conference.

His remarks came after the White House announced on Thursday that the United States was considering measures it could take in response to Iran’s shipment of fuel to the crisis-stricken Venezuela.

Iran will take appropriate actions internationally to protect freedom of navigation, Rabiee said.

“We hope that the United States would not make such a mistake,” he said, adding that “however, we take all the possibilities into account and we are ready for a worst-case scenario.”

On Sunday, Iranian officials warned that any attempt by the United States to block the country’s fuel delivery to Venezuela would trigger an “immediate” response from the Islamic republic.

(XINHUA)

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