Venezuela seeks multibillion-dollar agreements on oil and debt during UN summit

A delegation led by interim president Delcy Rodríguez is holding talks with international financial institutions and potential investors for this purpose. The developments are also relevant to Suriname, after both countries made agreements earlier this month on closer cooperation in the field of oil and gas.

According to news agency Reuters, talks began on Monday on, among other things, restructuring Venezuelan debt and new investments in the oil, gas and mining sectors. Venezuela’s total debt is estimated at between USD 150 billion and USD 200 billion. Debts of state oil company PDVSA also play an important role.

In New York, Rodríguez has met, among others, representatives of the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank (IDB). According to Reuters, the IDB is working on a programme to cooperate more intensively with Venezuela again over the next two years.

The talks are taking place as Venezuela seeks to bring foreign investment back to sectors that for years faced sanctions, limited access to capital and overdue investment.

Oil industry back in the spotlight

Venezuela’s oil and gas industry in particular is once again drawing strong interest from international companies. Venezuela has very large proven oil reserves, but production has for years remained below the level the country achieved in the past.

According to Reuters, discussions include a long-term agreement with US oil company ExxonMobil. In addition, US companies are involved in talks and projects concerning oil and gold.

Halliburton is also once again actively positioning itself in the Venezuelan market. The US oilfield services company has concluded agreements with Brazilian energy company Eneva and WESCA to explore potential oil and gas projects in Venezuela. The agreements fit into the broader search for foreign capital and technical expertise to further develop Venezuela’s energy sector.

In addition to oil and gas, Caracas is looking at its mining sector. Gold is among the key areas.

According to Reuters, discussions are also under way concerning approximately USD 4 billion in Venezuelan gold currently held at the Bank of England. A possible arrangement could lead to the gold, or its value, being transferred to the United States under supervision. A final arrangement, however, depends on legal and political decision-making.

Heavy debt burden must be addressed

Restructuring Venezuelan debt is an important part of the economic process. Without agreements with creditors, it may remain difficult for Venezuela to attract new international capital on a large scale.

The talks with international financial institutions do not yet mean that agreements have been concluded on new loans or debt relief. They do indicate, however, that Venezuela is again seeking to reconnect with international financial institutions and investors.

The IDB, the IMF and the World Bank can play different roles in this, ranging from economic analyses and technical support to financing, depending on the agreements eventually made.

Suriname recently made agreements with Venezuela

The developments follow only days after Rodríguez paid an official visit to Suriname. During her visit on September 11, Suriname and Venezuela signed ten documents for further cooperation. Agreements were made, among other things, on energy, fisheries, aviation, tourism, agriculture and education.

The agreements in the field of energy stand out in particular against the backdrop of the talks Venezuela is now holding in New York.

Venezuela has offered to share its knowledge and experience in oil and gas exploration and production with Suriname. Training and knowledge transfer were also discussed through, among others, the Venezuelan research institute Intevep and the Universidad Venezolana de los Hidrocarburos.

Suriname, meanwhile, is preparing for a major expansion of its own offshore oil industry. As a result, future developments in Venezuela may be relevant both from the perspective of cooperation and that of the broader regional energy market.

Northeastern South America increasingly important for oil industry

Besides Venezuela, Suriname and Guyana have also become important players in oil development along the northern coast of South America.

Guyana is now producing offshore oil on a large scale, while Suriname is preparing for the development of the GranMorgu project. Venezuela is simultaneously seeking to rebuild its existing oil industry and attract foreign investors.

This is creating a greater concentration of oil and gas activities in northern South America.

For Suriname, this does not automatically mean that investments will shift to Venezuela. Oil companies assess projects based, among other things, on reserves, production costs, contract terms, political and legal risks, and the speed at which a project can be developed. Renewed international interest in Venezuela does, however, increase the number of major energy projects in the same broader region competing for capital, equipment and specialised labour.

At the same time, the recent agreements between Paramaribo and Caracas offer opportunities for technical cooperation and knowledge transfer.

The negotiations in New York will therefore also be closely watched beyond Venezuela, as the country seeks to make its vast oil and mineral reserves more accessible once again to international capital.