New Brattle Whitepaper Explores the Past and Present State of Venezuela’s Hydrocarbons Sector
In a new whitepaper, “Venezuela’s Hydrocarbons Sector: Resource Potential, Structural Constraints, and Emerging Opportunities,” Brattle Associate Dr. Igor Hernández examines the current state of Venezuela’s hydrocarbons sector, including the structural factors underlying its long-term decline, policy and regulatory developments in the aftermath of President Nicolás Maduro’s removal from power, and possible implications for potential investors and energy market analysts.
The paper suggests that while there is renewed interest in exploring potential opportunities in the country, there are important constraints and questions that need to be addressed if the goal is to attract large investments. While there is a variety of projects that could aid in the potential recovery of Venezuela’s oil and gas industry, each poses different risks and opportunities for prospective companies considering investments in this sector.
Key takeaways include:
- The country requires a holistic approach to its energy policy to develop a system that can support sustained growth through reliable and affordable access to energy for its population and all economic sectors.
- The process of rebuilding the state and strong institutions will have to address the challenge of creating an inclusive environment for long-term social and political agreements that can support a shared vision for the country while aligning policy goals that can foster the country’s development.
- The pace and sustainability of Venezuela’s hydrocarbon sector recovery will depend on the credibility of institutional reforms, the clarity and stability of the regulatory framework, and the resolution of broader macroeconomic and political questions.
- Prospective investors interested in this sector will require careful calibration of risk, timing, and engagement strategy.
