Big Investors Shun Venezuela’s Flagship Oil Industry Event

Venezuela’s biggest annual gathering of oil investors used to be a memorable affair: thousands of oilmen from around the world would arrive, greeted by statuesque models, and attend whisky-fueled after-parties. The deal-making could run into the billions.

This year’s event was a far cry from previous years’ bashes, where hordes of investors would clamor for a stake in the country with the world’s largest oil reserves.

“It used to be much bigger,” lamented Hugo Hernández, a former head of the Venezuela Petroleum Chamber, reminiscing about the days when 40,000 participants would show up. “You know how the situation is in the country. Now many people don’t come.”

Organizers said slightly more than 3,000 people visited the expo this week, including hundreds of workers from state oil giant PDVSA.

Among the notable absentees were many of Venezuela’s foreign production partners. Of the more than 30 multinationals that have minority stakes in projects here, only two were listed as sponsors of the panel-discussion portion of the three-day convention, which also includes a trade show. PDVSA’s president couldn’t make it either: he was in Russia and India this week in search of fresh investment for the economically troubled country.

The lower turnout is reflective of the decay in the investment climate in Venezuela’s vital oil industry after a decade of shaky relations between the Socialist government and foreign oil companies. For years, partners have complained of slow project development and difficulties in repatriating dividends due to restrictive currency controls that also made investing prohibitively costly. The country has struggled to meet ambitious plans to boost output.

Hundreds of seats sat vacant during presentations aimed at wooing investors. Unlike on previous occasions, none of PDVSA’s production partners put up stands at the trade show, with some saying they expected little return from spending tens of thousands of dollars on logistics and promotional material.

“I think there was a consensus among us not to participate,” said one official at a production partner of PDVSA, who left during the conference’s first day.

The absence of the big fish left smaller services providers with fewer people to market their products to.

“I’m not sure what I’m doing here,” said a representative from an Asian company that does business with PDVSA.

Gustavo de la Rosa, a three-decade industry veteran who had a company expropriated by the government several years ago, offered a one-word reason why attendance has slid: “business.” There’s high potential, but operating here can be difficult, he said.

Alberto Held, the current president of the country’s oil chamber, argued that there’s no lack of interest in the oil sector, noting hundreds of private Venezuelan companies trying to get contracts with PDVSA.

But also presenting a challenge is the drop in oil prices over the past year that has exacerbated a cash-crunch for Venezuela, which depends on crude exports for virtually all of its dollar revenue.

The country expects prices to stabilize by the end of the year, Oil Minister Asdrúbal Chávez, who kicked off the conference, told attendees. He did not give a presentation, though, nor take questions.

Late arrivals by top Venezuelan oil officials put the conference proceedings hours behind schedule leaving little time for Q&A, in what’s supposed to be a rare open forum for investors to engage authorities.

Instead, the event’s organizer said responses to the unanswered questions would be posted later on the oil chamber’s website.

Non-Spanish-speakers may have missed that announcement. There were no translation services.

[“source – .wsj.com”]