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Opposition sweetens previous energy reform proposal

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Plan includes shrinking PDVSA, offering assets to foreign

firms

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Proposal aims to boost oil output above 3 million bpd

By Marianna Parraga

HOUSTON, March 12 (Reuters) - Venezuela's opposition has

drafted a broad proposal for energy sector reform that would

allow the participation of international companies in a bid to

attract support from Big Oil and from the U.S. administration,

according to sources and a summary of the proposal seen by

Reuters.

The re-election of U.S. President Donald Trump, whose

administration this month canceled a key license for U.S. oil

major Chevron ( CVX ) to operate in Venezuela citing President

Nicolas Maduro's lack of electoral reforms, is seen by

opposition leaders as an opportunity to ratchet up pressure on

the leftist president.

The proposed reform to Venezuela's hydrocarbon law sweetens

previous plans presented by the opposition in recent years, and

may be attractive to international oil companies, including

those in the United States.

It includes shrinking the size of state oil company PDVSA

while offering Venezuelan oil and gas fields, refineries and

midstream assets to foreign companies. PDVSA's stakes would be

open for private bidding.

"Venezuela is opening its energy sector to the world,

offering unprecedented investment opportunities and a clear,

rules-based framework for private sector leadership," the

proposal says.

The United States and other Western countries disputed the

official results of Venezuela's election last year, which

allowed Maduro's second re-election. The opposition published

voting tallies showing candidate Edmundo Gonzalez won.

A delegation representing opposition leaders Maria Corina

Machado and Edmundo Gonzalez participated at the CERAWeek

conference in Houston.

The reform proposal sets out plans to increase oil output

above 3 million barrels per day (bpd), a level not seen in 15

years, according to a summary of the document seen by Reuters.

Venezuelan crude output averaged 920,000 bpd last year.

The new proposal would also allow existing partners of PDVSA

to shift to more attractive contract terms, which would include

a lower take for the government.

International standards for investment protection would be

embedded into Venezuela's legal system, the proposal also says.

Nationalization of the industry two decades ago under former

President Hugo Chavez, and debt defaults, have led to dozens of

lawsuits and arbitrations, some of which are still ongoing. Many

creditors are going after Venezuela's crown jewel asset,

U.S.-based refiner Citgo Petroleum.

Venezuela sits on the world's largest reserves of crude and

Latin America's biggest reserves of natural gas but has seen

little investment in recent decades due to political turmoil,

nationalist policies and U.S. sanctions.

The opposition has struggled to find a path towards the

restoration of democracy in Venezuela following what they have

called electoral fraud. There is no sign of progress internally

toward a quick resolution of Venezuelan long-standing political

crisis.