2014-04-03 06:55:02 - Venezuela Oil and Gas Report Q2 2014 - a new market research report on companiesandmarkets.com
We retain a cautious stance on the Venezuelan oil and gas sector. While a flurry of new loans and deals may improve the financial position of PdVSA over the short term, the threat that badly needed funds will diverted from investment into the oil and gas sector to fund social programmes remains as real as ever. Moreover, although our long-term forecasts call for growth as projects in the Orinoco belt ramp up, we expect Venezuela to continue its underperformance given the scale of challenges - which range from political interference to chronic underinvestment. Similarly, despite abundant gas reserves, we expect Venezuela to remain a net importer of gas over the course of our forecast period.
The key trends and developments in
Venezuela´s oil and gas sector are:
- We continue to hold a conservative outlook for Venezuelan oil production, seeing more downside risk than upside in the near term in the absence of a wider overhaul of the sector. We acknowledge that there is some scope for improvement, with PdVSA having reported a flurry of recent loans and credit deals, which will see substantial funds pumped into the troubled firm to support upstream development. This could allow for some long-stalled projects in the Orinoco Belt to advance. However, the risk remains strong that, as in the past, funds intended to support the chronically underfunded oil and gas sector could be diverted to support additional social expenditure.
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