Report: PDVSA needs US$10bn investment

Venezuela's state oil company PDVSA needs US$10bn in investments if it is to recover fully, newspaper La Hora quoted oil expert Jose Toro Hardy as saying. Mobilizing such large sums will only be possible if PDVSA is downsized and the sector opened up to private companies that can raise the country's oil production, he said. Such private investment could lead to the creation of pension and retirement funds to the advantage of the company's workforce. The company has already undergone one downsizing when the administration of President Hugo Chavez sacked about half the company's 38,000 workers during and immediately after the December 2002-February 2003 strike. The shrinking of the country's economy has seriously set back Venezuela's economic development, Toro said. However, a more optimistic note for 2004 was sounded in a separate report on Venezuela from Barclays Capital Research, cited by newspaper El Universal. Thanks to improving oil production and better investments, the country's economy should grow 9% next year after contracting 11.7% in 2003, although this will only partly compensate for the 22% overall contraction of 2002 and 2003. "Crude prices should remain high and output is increasing, which suggests that international reserves will rise," the report said.