Venezuelan Ambassador Visits Tulsa

TULSA, Thursday, Sept. 6, 2001 - Employees and executives at CITGO Petroleum's Tulsa headquarters today met with Venezuela's new Ambassador to the United States, Ignacio Arcaya, who explained to them the landmark energy legislation the Venezuelan government plans to enact later this year.   CITGO Petroleum, 100 percent owned by the Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA), is Venezuela's largest investment in the United States. The heads of all of Venezuela's consulates in the U.S., from San Francisco to Boston, also visited Tulsa today for a meeting with Ambassador Arcaya.

"I want to emphasize the importance of CITGO not only to the work of the Energy Task force but also to Venezuela as a whole," Arcaya said.  "Your efforts this year have been outstanding and CITGO is clearly a vital part of PDVSA."

"For the first time since nationalization, the commercialization of certain products derived from natural hydrocarbons, directed to foreign markets, will be open to the private sector - through both mixed capital companies and totally private companies," Arcaya said.  "The domestic market for gasoline and other fuels was opened in 1998."

"This law is moving forward under a kind of 'fast-track' authority that has been a feature of Venezuelan constitutions for many years, the enabling law mechanism. Both the former constitutions and the new constitution enacted last year under President Chavez's leadership, allows the National Assembly to give the Chief Executive expedited authority to prepare and decree a set of clearly defined laws on vital national economic matters within an also specified time frame. The aim in this case is to pass the legislation by November 13."

"The Law is expected to be the result of a lengthy consultation process. In contrast to the 1943 Law, which was not subject of general consultation and which will be replaced by the new law, the current draft of the Hydrocarbons Law is a working paper, subject to open consultation. In the Minister of Energy and Mines' opinion, 'this is a Law for the Venezuelans of the future'."

"The Venezuelan government has made the final deliberations and actions on the new Hydrocarbons Law a very open process. This month, the government posted the draft law on the World Wide Web. We have invited comments not only from our own citizens but also from business people who are potential operating partners and investors in the Venezuelan energy sector. It is necessary to promote a constructive debate, oriented to considering and evaluating the recommendations presented by participants in a framework that includes the key aspects contained in the Hydrocarbons Law draft."

"All observations and comments related to the Hydrocarbons Law draft should be sent directly to the Committee of nine distinguished Venezuelans from the public and private sectors created for that purpose. These Venezuelans include the heads of the Ministries of Energy and Mines, Planning and Development, and Finance; representatives of the Central Bank and the Petroleum Chamber; the President of PDVSA; and several renowned analysts."

"That committee will decide upon the final law. Among those that have sent comments on the draft are Venancham's International Oil Committee (Venamcham is the Venezuelan-American Chamber of Commerce), Conapri (the National Council for Investment Promotion), and the Hydrocarbons Committee of Fedecámaras (the National Federation of Chambers)."

"We expect this law will bring about necessary changes and clearer directions for the future energy investments in Venezuela. All existing deals with foreign firms will be honored, and concessions and other taxes won't be affected, as has been declared by Minister Alvaro Silva Calderón. One member of the President's Committee in charge of the draft's review has mentioned that this protection will be included explicitly."

"Venezuela is advancing towards a new energy policy, by unifying and modernizing the current patchwork of energy laws, and through the efforts to enhance energy cooperation of the Energy Task Force," Arcaya said. "CITGO is a very active participant in the Task Force, and you are all invited to visit the Embassy's website and take a good look into the Organic Hydrocarbons Law draft."