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Julio A. López, Editor-in-Chief.— Venezuela needs investment. It needs capital, technology, expertise, markets, and companies capable of restoring to its hydrocarbon industry the scale it once had. That is why we have supported the opening of the oil and gas sectors and welcome contracts that enable the development of resources that remained underground for years while the country grew poorer.
What happened today with the Lorán gas field demonstrates the scale of the opportunity. BP, together with XRG—the international energy investment arm of ADNOC, the state-owned energy company of the United Arab Emirates—and UCC, obtained a license to develop the field’s second phase. The three companies will hold equal stakes, and the project involves up to 4 trillion cubic feet of gas. Shell had already received the license for the first phase in June.
That is good news. And so will be every contract that succeeds in increasing production, restoring infrastructure, creating jobs, bringing in technology, developing gas, oil, and petrochemicals, and restoring Venezuela to a relevant position in international energy markets.
There should be broad national consensus on this. Oil and gas have no ideology. A well produces regardless of who is in government, and an investment benefits the country by creating jobs, generating taxes and royalties, increasing production, and stimulating economic activity.
But precisely because we support the opening of the sector, we must demand something fundamental: absolute transparency.
Hydrocarbon contracts cannot become documents known only to ministers, government officials, lawyers, and the companies that sign them. The resources being negotiated do not belong to the government of the day or to those who happen to administer the state. They belong to Venezuela.
And transparency must begin before the contract is signed.
Oil and gas blocks should be put out to competitive bidding through public, fully transparent processes, with rules established in advance and verifiable technical, financial, and operational criteria. Venezuela should seek to attract as many qualified companies as possible and allow them to compete for its resources on equal terms.
Otherwise, we hand bureaucrats and politicians extraordinary powers to decide not only the conditions under which international companies exploit our hydrocarbons, but also something even more sensitive: who gets in, who is left out, and under what terms each company participates.
That discretionary power inevitably opens the door to favoritism, privileges, and corruption. When several interested parties seek to develop the same block, the decision should not be left to a government office or to the will of an official. It should depend on a transparent, competitive process that determines which proposal offers greater investment, better technology, higher production, and better economic terms for Venezuela.
Then comes a second obligation: publish the contracts.
Venezuelans have the right to know who receives a license, what stake they obtain, how much they will invest, what royalties will be paid, what taxes they will pay, what commitments they assume, how long the contract will last, under what conditions it can be amended, and what obligations the state assumes.
We are not inventing some revolutionary principle. Venezuela is going through a moment when such transparency is indispensable. The hydrocarbon reform approved this year opened a process of contract migration and negotiation with national and international companies. Chevron, Eni, Repsol, and other operators are participating in this new landscape, while new investors are evaluating their entry into the country.
The greater the international interest, the greater the need for transparency.
We are not questioning the signing of contracts. Quite the opposite: we want many of them. We want American, European, Arab, and Asian companies competing to invest billions of dollars in Venezuela. But precisely for that reason, we want competition.
Transparency also protects the government and companies. An open bidding process reduces suspicion; a public contract makes it possible to compare terms; and both strengthen legal certainty and demonstrate that no one received hidden privileges.
The line separating genuine economic opening from the division of the spoils can be extremely thin.
That line has a name: transparency.
The blocks should compete for the best investor, and investors should compete for the blocks.
Oil and gas are underground. The bids should be made public, and the contracts should be available to everyone.
Without transparency, there is no contract. There is only the division of the spoils.
