Venezuela’s Gas Sale to Colombia Not Possible in the Short Term

Colombian Finance Minister José Antonio Ocampo stated in an interview that there exists a possibility of Colombia importing gas from Venezuela. However, Rafael Quiroz, a Venezuelan economist and oil and gas expert, said in an interview with Sputnik that the project may be feasible “only in the medium and long term.”

On February 17, Colombian Finance Minister José Antonio Ocampo said in an interview with the Venezuelan television station Globovisión that there is an “interesting possibility” that Colombia could start importing Venezuelan gas.

In conversation with Sputnik, Venezuelan economist and oil and gas expert Rafael Quiroz highlighted Venezuela’s impossibility to export gas to Colombia at the moment, although the two countries have gas pipeline infrastructure connecting the Venezuelan north-western province of La Guajira and Colombia’s Atlantic Coast (north).

“In the medium term, it is possible; in the short term, it is impossible,” Quiroz said. “We cannot export a single molecule of gas to anywhere for the rest of the year. The infrastructure is physically assembled, but the matter is that we are not able to export gas to anyone for now.”

The lack of investments in Venezuela’s oil sector is one of the reasons that make it difficult for Venezuela to export gas to Colombia, according to Quiroz.

“At this moment, Venezuela is not in a position to invest a single penny in any of its oil areas. Unfortunately, that is the way it is,” the economist lamented. “We depend on the inflow of international oil capital to upgrade our refineries and oilfields.”

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Quiroz added that the medium or long term export of Venezuelan gas will depend “on the deposits of what we call free gas or natural gas.”

“That is because 91% of Venezuelan gas reserves are of what we call associated gas,” that is, gas that “coexists in a field with crude oil, and its extraction compromises crude oil production,” he explained.

According to the expert, Venezuelan petroleum production has been stagnant “for five years,” and that “last year it closed at 695,000 barrels per day.”

“We cannot supply the usual customers, we are at a standstill, not for lack of transnational companies,” Quiroz highlighted. “Today there are 38 transnational companies in Venezuela and they are idle, waiting for PDVSA to have money to be able to invest.”

“As these are joint ventures, if the multinationals invest five dollars, PDVSA, as a partner in that venture, has to invest five dollars,” he explained.

Regarding Venezuelan gas production, Quiroz considered that, in the medium term, “it is possible that Venezuela will be able to export to the extent that PDVSA reaches free gas fields, that is to say, fields that do not coexist with crude oil.”

He added that this medium term objective is possible if an investment agreement is also reached with Colombia, since “Venezuela will not do it on its own.”

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Monómeros
In September 2022, the government of Colombian President Gustavo Petro returned the control of fertilizer company Monómeros to the Venezuelan government. Three years before that, the then president of Colombia, Iván Duque, handed over the company to former Venezuelan deputy Juan Guaidó, who had proclaimed himself the “interim president” of Venezuela. Venezuelan President Nicolás Maduro accused the Duque administration of stealing the Venezuelan state asset, in lockstep with the economic blockade imposed on Venezuela by the US.

In 2006, Colombia divested its shares in Monómeros, which until then was a majority Colombian state-owned enterprise, and Venezuelan state-owned petrochemicals manufacturer Petroquímicos de Venezuela (Pequiven) bought those shares. After acquiring the remaining shares that was in the hands of Dutch capital, Pequiven came to control 100% of the shares of Monómeros.

Colombian Economy Minister Ocampo also brought up the possibility of the Colombian government reacquiring some shares in Monómeros, in order to supply fertilizers to the Colombian agricultural sector.

“Unfortunately, there was a wrong decision by Colombia to sell its shares, but we hope to have this company with a great dynamic again,” Ocampo said in the Globovisión interview.

Quiroz considers favorably the possibility of Colombian recapitalization of the company, since “PDVSA would ensure the efficient management of Monómeros.”

“The Colombians are very serious about the oil business and they, of course, need the production from Monómeros, the fertilizers for the Colombian agricultural sector,” Quiroz said.

With the purchase of some Monómeros shares by Colombia, “Venezuela would have some significant income, proportionally defined according to the number of shares or according to the capital that Colombia wants to invest in the company, which is a Colombian company with completely Venezuelan capital,” he concluded.

 

 

(Sputnik)

Translation: Orinoco Tribune

OT/SC/AF