The Daily Journal.- Rebuilding Venezuela’s energy infrastructure, which has suffered severe damage from corrosion and years of accumulated deterioration, will require multibillion-dollar investments that industry estimates place between US$100 billion and US$220 billion.
Economist Francisco Monaldi, director of the Latin America Energy Program at Rice University’s Baker Institute for Public Policy, estimates that the minimum investment required amounts to US$100 billion. According to the specialist, the rehabilitation process will take at least a decade before the country can restore its historical production levels of more than two million barrels per day.
Monaldi argues that attracting these resources will depend primarily on transforming the country’s political conditions, a key factor in building the confidence that global investors demand. He also noted that the recently approved changes to hydrocarbon legislation do not provide the institutional and legal stability guarantees that major companies in the sector require.
According to information published by the specialized outlet Oil Price, international oil companies will commit capital on this scale only if the country establishes a solid and predictable legal framework that ensures an adequate return given the substantial investment required.
Written with information from Banca y Negocios
