After Chávez, What Happens to Venezuela's Oil?

The oil storage facility owned by Petróleos de Venezuela, known as PDVSA, on Lake Maracaibo, Venezuela Photograph by Ana Maria Otero Borjas/Bloomberg

Investors have been cart-before-horse stoked about Venezuela, and with good reason. There’s lots of upside in an economy that arguably has the world’s largest proven oil reserves and yet has stagnated in the past 14 years. What’s now top-of-mind is how the successor to late president Hugo Chávez stewards state oil company Petróleos de Venezuela SA, whose strategy seems to be to rust while hoping energy prices remain high. Throw in a restive nation of 30 million and a welter of costly social bennies, and this caballero faces tough decisions.

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