12.500
%
Uncertain
93
mm boe
90
%
While doubts over the Government's ability to stamp out corruption remains, there is a feeling that the country is starting to become more democratic. While the OFAC General Licence expires in April, and renewal depends on the establishment of free and fair elections, the country is on the right path. Consequently, we change our outlook to Uncertain and reduce our risk premia to 12.5%.
February 1, 2024
Americas - South
mm bbl
bcf
Northern South America, bordering the Caribbean Sea and the North Atlantic Ocean, between Colombia and Guyana.
Concession
Upstream activities can be performed through joint venture corporations (empresas mixtas) in which the state owns more than 50% of the shares (qualifying the entities as state-owned enterprises). The National Assembly must approve the incorporation of any joint venture corporations and the conditions for their operation. These corporations are owned by Petróleos de Venezuela, S.A. (PDVSA).
Venezuela’s economy experienced a sustained recession from 2014 to 2020, shrinking around 70% in 7 years and rebounded since 2021, mainly due to the easing of constrains imposed by the COVID-19 pandemic and rising oil prices. The IMF estimates GDP growth to be 5% in 2023 and 4.5% in 2024. The country experienced hyperinflation from December 2017 until December 2021. The IMF’s April 2023 report outlined that annual inflation reached its peak at 65,374% in 2018. In 2022, the annual rate was 310.1%, the lowest since 2016. The report forecasts that inflation is likely to reach over 400% in 2023 and 200% in 2024. On 30 December 2022 the 2015 National Assembly of Venezuela democratically voted to disband the interim Government and the position of constitutional interim President held by Juan Guaidó, with effect from 5 January 2023. The UK respects the result of this vote and considers the 2015 National Assembly the last democratically elected institution in Venezuela. Presidential elections are due in 2024.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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