CARACAS - Venezuela will maintain its oil industry tax and legal framework under the leadership of acting President Nicolas Maduro, the OPEC nation’s oil minister said on Friday to reassure foreign investors after the death of President Hugo Chavez.
Rafael Ramirez told Reuters that Venezuela would continue to push for a minimum price of $100 per barrel at the next OPEC meeting, and that he did not expect Chavez’s death to push up crude prices.
“The tax and legal framework were set out clearly by President Chavez,” the oil minister said outside the National Assembly, where Maduro was being inaugurated as acting leader on Friday ahead of a new presidential election due in weeks.
“While our government is here and the people remain in charge, our oil policy will remain unchanged.”
Ramirez said he expected the South American country to increase its oil output by 500,000 barrels per day (bpd) this year, bringing its total production to 3.5 million bpd.
The government says it is pumping 3.0 million bpd, but many industry experts question those figures. Analysts say Venezuela produced just 2.34 million bpd last month.
Ramirez said state oil company PDVSA invested $22 billion in 2012, and expected to invest $25 billion this year.
He said foreign energy companies working with PDVSA in Venezuela sent condolences following Chavez’s death after a two-year battle with cancer, but had expressed no concerns about the political situation in the country with the world’s biggest oil reserves.
“Everything is normal in the oil industry. We’re guaranteeing fuel supplies,” Ramirez said. “We will keep our oil policy the same, internally and in OPEC ... we will defend a minimum price of $100 per barrel (at the next meeting).”
The next gathering of the oil producers’ cartel is scheduled to take place in Vienna on May 31.
Ramirez said PDVSA was focusing all its efforts on the Orinoco extra heavy crude belt, where it has a string of projects with foreign companies including U.S. major Chevron (CVX.N), Spain’s Repsol (REP.MC) and Russia’s Rosneft ROSN.M.
Those projects are expected eventually to add 2 million bpd of new output via investments of more than $80 billion.
But that will take years, with executives at some of the joint ventures saying work there has often been delayed by lack of infrastructure and delays in payments from PDVSA.
Ramirez said PDVSA had sharply increased its investment in operations in recent years, from just $3 billion in 2005.
“Production doesn’t react immediately,” Ramirez said, adding that nonetheless he expected to see a rapid rise in output from the Orinoco region.
“It’s an extraordinary plan for any oil-producing nation.”
Writing by Daniel Wallis; Editing by Gary Hill and Lisa Shumaker