CARACAS, Feb 24 (Reuters) - About a dozen foreign energy companies in Venezuela have been authorized to exchange foreign currency at a new, more advantageous rate in bolivars in order to boost cash flow and speed up projects, a high-level PDVSA source said on Tuesday.
The companies, participating in joint ventures in various fields around Venezuela, can now buy local currency at the Simadi rate, currently averaging 172 bolivars per dollar, compared to far more disadvantageous rates used in the past.
“This will increase the bolivars they have for capital expenditure and operational expenditure. It is a huge incentive and drastically affects cash flow,” the PDVSA source, who requested anonymity because they were not authorized to speak publicly on the matter, told Reuters.
“Partners who have been skeptical will now be encouraged to speed up,” the source said.
State-owned oil and natural gas company PDVSA’s foreign partners have long cited as an impediment to investment Venezuela’s strict currency controls which until this month operated rates of 6.3, 12 and 50 bolivars per dollar.
That had been a disincentive to investment and slowed projects, particularly in the heavy-crude Orinoco Belt where the OPEC member pins its hopes on increasing output.
PDVSA has sent the Finance Ministry a list of companies authorized to use the new Simadi system for specific joint ventures, the source said.
“Those companies are the ones who have continued to bring in financing. This change will decrease hugely the amount they need to bring in for operating and capital expenditure,” he said.
The foreign companies allowed to use Simadi in those joint ventures are, he said, China National Petroleum Corp (CNPC), Chevron, Gazprom, Perenco, Repsol, Eni, Rosneft, Total, Statoil and Petrovietnam.
The change to Simadi means those companies would only need to bring into Venezuela about $260 million this year for projects covered by the agreement, far less than they would otherwise have had to for the same purposes, the source said.
PDVSA’s foreign partners have accumulated billions of dollars in pending dividends in recent years, whose repatriation is being negotiated to speed up investments and credits related to crude production in the South American country. (Editing by Grant McCool)