Por Marianna Parraga
* A new government would keep existing laws, stay in OPEC
* Opposition alliance would focus on raising output
* No backlash against companies that worked with Chavez
CARACAS, Nov 23 (Reuters) – Venezuela’s opposition coalition plans to keep most of Hugo Chavez’s oil policies in the short term if the socialist president loses his reelection bid in 2012, according to their economic advisors.
A loss for Chavez, who faces his toughest election yet as he recovers from cancer, could open new opportunities for oil companies seeking access to vast heavy crude reserves and help boost the OPEC nation’s flagging oil production.
Advisors to the Democratic Unity coalition told Reuters that although there would be long-term major changes, they will at first maintain state-focused oil laws created by Chavez, respect investment deals signed under his government, and keep Venezuela’s membership in the global producer group.
“It would be a transition much like that of Chile, meaning we could make changes based on the existing rules,” rather than upending the existing model, said Pedro Benitez, an economist advising the opposition. He was referring to Chile’s 1990 transition from dictatorship to democracy.
The coalition is preparing an outline of its oil policies as part of preparations for its fight to unseat Chavez in the Oct. 7, 2012 presidential vote..
The advisors said they would avoid a backlash against politically allied oil companies from countries like Russia and China that have signed numerous pacts with the Chavez government.
That pragmatic approach would help the opposition present a relatively moderate stance in the October vote after a decade of radical confrontation with Chavez that ultimately helped the former leader rally his support base.
It would also limit fallout from a transition to a new government a decade after Chavez took control of PDVSA and turned it into the financier of his anti-poverty crusade.
Under his leadership, PDVSA has taken charge of social projects ranging from housing construction to food distribution but has struggled to increase output even though the country has what are now considered the world’s largest oil reserves.
Chavez has hit the campaign trail and declared himself cancer-free after diagnosis in June of an undisclosed type of cancer, though most doctors say it is far too soon to know if he has in fact overcome the illness.
He also faces growing complaints from his support base among the poor over high crime, unemployment and lack of affordable housing.
Venezuela’s opposition in February holds a primary vote to determine which of five presidential hopefuls will face Chavez. The candidates have so far avoided giving specific details on what changes they would make to the country’s heavily government-controlled economy.
The front-runners are state governors Henrique Capriles Radonski and Pablo Perez.
Despite ample interest from oil majors ranging from Chevron to Eni , the slow pace of negotiation with the Chavez government, PDVSA’s lack of financial resources and huge required infrastructure investments have made it difficult to get projects off the ground.
The opposition would seek to boost oil output, which even according to government statistics has been flat for close to five years, by boosting production in the vast Orinoco heavy oil belt and mature fields.
The group will also review bilateral agreements between Venezuela and allied countries that provide oil on advantageous conditions, with particular focus on the 100,000 barrel-per-day supply deal with communist-run Cuba.
“A country like Venezuela simply cannot maintain that kind of agreement, it’s absurd,” said Benitez.
Limiting outlays from those agreements, which include the PetroCaribe accords that provide oil and fuel to close to a dozen Caribbean nations, would boost available resources for investments in schools roads, and hospitals, he said.
The proposals also call for an eventual increase in the price of Venezuela’s gasoline, which ranks as the world’s cheapest at $0.02 per liter.
“Some unpopular measures were included, but all of those measures will be gradual and protect the most vulnerable,” said Ronald Balza, another economist advising the opposition.
“The next government will have to work within certain limitations, it can’t make radical changes immediately.”
Chavez has built up a strong base of support among the country’s poor through heavy spending on social projects.
But supporters have increasingly complained of high crime, decline of basic services such as electricity, and deterioration of social programs including the flagship health program linked to the oil supply deal with Cuba.