January 28, 2020 / 11:34 PM / a month ago

Venezuela government-backed lawmakers eye boosting private role in oilfields

CARACAS (Reuters) - A group of Venezuelan lawmakers backed by the ruling Socialist Party are exploring ways to increase the participation of private companies in the OPEC nation’s oilfields, one of the legislators said in an interview on Tuesday.

Lawmaker Leandro Dominguez takes part in a news conference after a meeting of the government-backed lawmakers at Venezuela's National Assembly in Caracas, Venezuela January 28, 2020. REUTERS/Fausto Torrealba NO RESALES. NO ARCHIVE.

Lawmakers calling themselves opponents of President Nicolas Maduro on Jan. 5 declared legislator Luis Parra to be the new chief of Congress. But a majority of members of Congress dismissed Parra and his allies as government stooges and re-elected opposition leader Juan Guaido as parliament chief.

Leandro Dominguez, tapped by Parra’s allies to head up energy issues, said on Tuesday he would consider reforms allowing private companies to have majority stakes in oilfield joint ventures - which is barred by existing law.

“Private capital must invest, private capital must participate, it is one of the things we must stipulate in the law,” he told Reuters.

Asked about private firms having a majority in joint ventures, he responded, “In some joint ventures, why not? Why not allow that?” He added that the government would remain in complete control of state oil company PDVSA.

Legislative changes under Parra appear unlikely to bring in new investments from Western companies because most nations in the region recognize Guaido’s leadership and Parra is under sanction by the United States.

But it could pave the way for greater involvement by Russia, which is among the countries that back Parra’s leadership and has been crucial in helping Maduro undermine U.S. oil sector sanctions.

The opposition has said Maduro pushed to install Parra as the head of Congress in order to approve changes to oilfield contracts. Maduro has ignored decisions by Congress and gone around it to implement policy by decree since the opposition took control in 2016.

Maduro calls Guaido a U.S. puppet seeking to oust him in a coup.

Dominguez, a petroleum engineer who has worked as a consultant at refinery projects, said he would prioritize investigating corruption and lobbying to remove military personnel from PDVSA posts to boost oil output.

Production tumbled to below 1 million barrels per day (bpd) in 2019 amid a six-year economic recession.

He said Manuel Quevedo, a former National Guard major general whom Maduro named oil minister and PDVSA president in late 2017 despite his lack of industry experience, should resign.

“Members of the military should return to the barracks, as it should be,” Dominguez said.

Neither PDVSA nor the oil ministry immediately responded to requests for comment.

Guaido’s allies have also proposed legal reforms allowing private companies a greater role in the oil sector, but say Maduro must leave office before a true recovery can take place.

Dominguez, by contrast, said he wants to work with Maduro to turn the industry around.

Reporting by Deisy Buitrago and Luc Cohen in Caracas; Writing by Luc Cohen; Editing by Matthew Lewis

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