Venezuela’s crude oil production could increase dramatically as soon as this year, U.S. Energy Secretary Chris Wright said during his visit in the South American country.

“This year, we can drive a dramatic increase in Venezuelan oil production, in Venezuelan natural gas production and Venezuelan electricity production,” Wright said, as quoted by Reuters, following a meeting with interim president Delcy Rodriguez.

Currently, Venezuela produces around 1 million barrels of oil daily and has been having chronic problems with electricity supply. Higher oil, gas, and electricity production should lead to more job creation, higher wages, and better quality of life for Venezuelans, the U.S. Energy Secretary also said.

Wright also addressed the oil business of Chinese companies in Venezuela, saying if that business was legitimate, the United States was fine with it but Washington would seek to avoid “damaging” deals between Chinese companies and Venezuela.

“China does a lot of deals in countries where they are not mutually beneficial, Wright said. “They have been quite damaging to nations in South America, Africa and around the world. So I think with U.S. help and with U.S. partnership we want to stop those kind of deals.”

Commenting on a recent change in Venezuela’s oil law, Wright said that it was “a meaningful step in the right direction”, as quoted by AP, but “probably not far and clear enough to encourage the kind of large capital flows.”

Per the new law, private companies “will assume full management of the activities at its own expense, account, and risk, after demonstrating its financial and technical capacity through a business plan” that will be subject to approval by the Venezuelan oil ministry. The ownership of the resources to be developed by private companies, however, will remain with the Venezuelan state.

The new law also caps royalty rates at 30% but allows the government to set individual royalty rates for projects based on factors such as investment needs and competitiveness.

By Irina Slav for Oilprice.com

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Venezuela’s crude oil production could increase dramatically as soon as this year, U.S. Energy Secretary Chris Wright said during his visit in the South American country.

“This year, we can drive a dramatic increase in Venezuelan oil production, in Venezuelan natural gas production and Venezuelan electricity production,” Wright said, as quoted by Reuters, following a meeting with interim president Delcy Rodriguez.

Currently, Venezuela produces around 1 million barrels of oil daily and has been having chronic problems with electricity supply. Higher oil, gas, and electricity production should lead to more job creation, higher wages, and better quality of life for Venezuelans, the U.S. Energy Secretary also said.

Wright also addressed the oil business of Chinese companies in Venezuela, saying if that business was legitimate, the United States was fine with it but Washington would seek to avoid “damaging” deals between Chinese companies and Venezuela.

“China does a lot of deals in countries where they are not mutually beneficial, Wright said. “They have been quite damaging to nations in South America, Africa and around the world. So I think with U.S. help and with U.S. partnership we want to stop those kind of deals.”

Commenting on a recent change in Venezuela’s oil law, Wright said that it was “a meaningful step in the right direction”, as quoted by AP, but “probably not far and clear enough to encourage the kind of large capital flows.”

Per the new law, private companies “will assume full management of the activities at its own expense, account, and risk, after demonstrating its financial and technical capacity through a business plan” that will be subject to approval by the Venezuelan oil ministry. The ownership of the resources to be developed by private companies, however, will remain with the Venezuelan state.

The new law also caps royalty rates at 30% but allows the government to set individual royalty rates for projects based on factors such as investment needs and competitiveness.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com

• Siemens Boasts Record Gas Turbine Demand
• Oil Prices Rise as U.S.-Iran Tensions Simmer
• Saudi Arabia’s Aramco Begins Production At $100B Jafurah Gas Project