CERAWEEK-Venezuela's opposition drafts energy reform to raise foreign pressure on Maduro

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.N 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.