Jan. 15 (Bloomberg) -- Venezuelan President Hugo Chavez, who wants term-limits abolished so he can run again in 2012, faces budget deficits, rising borrowing costs and currency devaluation after earnings from oil exports plunged.

The CHART OF THE DAY plots the estimated value of crude production during the last decade, according to data compiled by Bloomberg. The lower line shows that 10-year government bond yields have ballooned as the economy worsened. The state relies on oil revenue for half its spending.

The rally in prices until July masked the impact of declining crude production, down 33 percent in the last 10 years. Venezuela, which had nationalized foreign-operated fields, is courting investment from Total SA, Chevron Corp. and Royal Dutch Shell Plc to develop new deposits and revive output, the New York Times reported today.

“As prices fall, it would be natural for them to reverse course and become more accommodating to foreign investors again,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “But there is no trust that contracts will be honored in the long run.”

Chavez has used rising oil revenue to finance spending on education and healthcare since he became president in 1998. Venezuelans will probably decide next month whether the socialist ex-paratroop colonel can seek re-election after lawmakers voted to allow the proposal yesterday.

To contact the reporter on this story: Will Kennedy in London at wkennedy3@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net.

Last Updated: January 15, 2009 08:42 EST