Although the effects of the suspension of some US sanctions were not immediate on Venezuela’s economic indicators, Washington’s decision aroused interest from neighboring countries in resuming business with Caracas, mainly in the energy sector. With the Venezuelan state oil company, PDVSA, free from some blockades, Colombia and even Brazil have already expressed their desire to invest in the country.

On his last visit to the Venezuelan capital, on November 18, the Colombian president, Gustavo Petro, met with Venezuela’s president, Nicolás Maduro, and stated that the countries must sign energy agreements in the electricity and gas sectors.

“We will build clean energy projects, which can be abundant in the north of Colombia, to transmit electrical energy to the West of Venezuela and we will bring from Venezuela energy that still exists, to try to cover the deficits that exist in Colombia. […] It is very likely that Ecopetrol [empresa estatal de energia colombiana] become a partner of PDVSA in the exploration of gas fields in Venezuela and oil fields. This way we will ensure, in both ways, electrical energy for Venezuela and fossil raw materials for Colombia”, she said.

The Colombian president’s intentions have already been confirmed by Ecopetrol, which, in a statement, announced the signing of agreements with PDVSA for December 2024.

Brazil’s desire to resume partnerships with Venezuela was announced by the president of Petrobras, Jean-Paul Prates. At the end of October, on the EPBR Agency channel, he said that the relief in sanctions inspires the Brazilian state-owned company to “think about seriously considering investments in Venezuela”.

“There is a concrete possibility. Venezuela has the largest oil reserve in the world, larger than Saudi Arabia. They are in great need of investment and the last Venezuelan governments have had, for various reasons, setbacks in the operational part of the sector. The installations , the oil industry and the production chain have suffered very serious deterioration and renewal is necessary”, he said.

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Can Colombia’s demand be supplied by Venezuela?

The intentions expressed by the Colombian and Brazilian governments must respect the internal situation of each country. In the case of Bogotá, the Petro government is dealing with an increase in demand for other energy sources alternative to hydroelectric power, as the sector is experiencing a period of low productivity due to the drought caused by the El Niño phenomenon.

The country has been betting on natural gas as an alternative, which has generated an increase in imports. According to the National Association of Generating Companies (Andeg), Colombia has already increased gas purchases by 60% this year compared to the same period in 2022. Furthermore, the supply of energy generated by gas-powered plants should cover between 25 % to 30% of national demand in 2023, when in wet years the index does not exceed 15%.

However, Colombia’s demand for alternatives is urgent, as the advance of El Niño, which is expected to reach its peak of activity from December until next year, could further affect the hydroelectric sector, the country’s main energy generator. Furthermore, the National Hydrocarbons Agency’s prognosis is that Colombia’s oil and gas reserves should only last about 7 years.

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“This means that Venezuela, being the main oil reserve in the world, is clearly Colombia’s first option”, says Franco Vielma. Sociologist specialized in the oil sector, the researcher told Brazil in fact that the agreements between Bogotá and Caracas on energy matters should be advantageous for both countries in the short term, but that the Colombian government will be forced to review the terms mentioned by Petro in the coming years.

“Colombia will need to offer Venezuela an agreement that is advantageous and that does not only have the benefit of electricity supply in the western region. This is a cyclical factor, but what Colombia needs is a reliable supplier that can meet its demand for fuels – immediate and future – at reasonable prices”, he states.

The urgency of the issue was clear in the statement issued by Ecopetrol, confirming the investment intentions with PDVSA announced by Petro. “Having known the background and the need to import gas for the coming years, the board of directors asked the administration to quickly evaluate the different alternatives to guarantee the availability of gas in the quantities and deadlines requested,” said the company.

Furthermore, Colombia’s Minister of Mines and Energy, Andrés Camacho, also warned of the delicate situation of Colombian demand and said that the prices charged by Venezuela would compensate for the investments.

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“In 2023, the market offered, on average, 183 thousand BTU of natural gas per day at 16 dollars per unit, much more expensive than gas from Venezuela. If we achieve more competitive prices, this will imply an important reduction in generation costs of thermal energy for the country”, he said.

For Venezuelan journalist Andrés Rojas, a specialist in covering the oil market, the low prices of Venezuelan gas are due to the weakness of the industry itself, which has gone through the worst crisis in its history since 2014, worsened by the US blockade since 2017.

“There are issues to resolve, such as the technical conditions for exporting this gas, the problem of maintaining the facilities and a third factor is related to the price, which has been an obstacle because Venezuela always aspires to higher prices. I believe that PDVSA would currently be willing to charge these prices, because the opposite is to have nothing”, he states.

The geographic proximity between the two countries that share more than 2 thousand kilometers of border is an advantage that should make transport costs cheaper. The Colombian state-owned company stated that, if implemented, the Venezuelan gas import project should reactivate the Antonio Ricaurte binational gas pipeline, located north of the border between the two countries. The project, which was inaugurated in 2007 by then presidents Hugo Chávez, of Venezuela, and Álvaro Uribe, of Colombia, has been deactivated since 2015.

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Rojas states that, due to the ease of connection and proximity, it is likely that the gas that should be sold to Colombia comes from the production of Cardón 4, a mixed plant owned by PDSVA with the Italian ENI and the Spanish Repsol. “Because there is already a connection between Cardón 4, in Paraguaná, and Maracaibo, and between Maracaibo and this gas pipeline that goes to Punta Gallinas, in Colombian Guajira, then everything indicates that the agreements would, in principle, be with Cardón 4”, he says.

Should Brazil invest in Venezuela?

Brazil, however, has not yet announced any concrete negotiations with Caracas and the interest in energy partnerships was expressed by the president of Petrobras, Jean-Paul Prates, who praised the negotiations between the government and opposition in Venezuela, a factor that preceded the suspension of sanctions by the USA.

“These negotiations were very important because the US also realizes that shale and fracking have a shelf life and these practices will not take them to the end of the oil era. […] The USA today is the largest oil producer in the world, but this has a shelf life, either it becomes dependent on the Middle East or it allows a country on the continent to produce. They’re looking 30 years ahead, not now,” he said.

Furthermore, Prates said that although the easing of the blockade lasts six months and can be renewed, “it is a very important process and I can assure you that Brazil, with President Lula’s leadership role in Latin America, will be a protagonist in the discussions “.

Partnerships between Petrobras and PDVSA have been occurring since the 1990s, but it was only in 2005, during the Chávez and Lula governments, that the state-owned companies deepened their relations. That year, 15 cooperation agreements were drawn up between Brazil and Venezuela and 11 of them were signed between the two state oil companies.

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The areas were comprehensive and ranged from joint exploration in oil and gas fields to the construction of tankers and technical and scientific cooperation. However, most of the projects were discontinued due to economic and political issues within each country.

For Franco Vielma, a sector that has the potential to reactivate partnerships between the two countries’ state-owned energy companies is fertilizers, the leader in Brazilian imports from Venezuela between January and October 2023, according to official data.

“Brazil depends heavily on fertilizers, which are products of the petrochemical industry, generated by the oil and gas industry. Brazil acquires these products mainly from Russia, nowadays. Let us remember that recently, the government of Michel Temer and then the government of Jair Bolsonaro were governments that turned their backs on Venezuela, broke binational relations and Brazil had to start importing an additional portion of fertilizers that it previously imported from Venezuela, from Russia, under expensive conditions”, he states

Editing: Leandro Melito


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