Legal Reform and Business Realities in Venezuela

So Margarita, I'll direct my first question to you if you don't mind.

So from where you sit in Caracas, how would you describe the current environment? And, you know, how does it feel different from, say, a year ago?

Yes, thank you, Joe.

Well, from Caracas, the environment feels very, very different from a year ago.

A year ago, most conversations about Venezuela were still focused on sanctions, on the challenges facing our economy, whether companies should stay away from the market.

Today, the conversation has changed completely.

We're seeing companies asking not whether Venezuela is investable, but asking under what conditions they can enter the market and how they should structure their investment.

Also, there's clearly more activity on the ground.

We're seeing more visits from international companies, more interest from investment funds, more meetings, discussions around potential projects, particularly, I would say, in oil, gas, electricity, mining, infrastructure.

I would say that part of this change is being driven by the recent legal reforms, part by the reopening of certain sectors through the OFAC licenses, and part by a growing perception, I would say, that Venezuela is entering a new and different economic phase.

Besides all this, several developments that would have been difficult to imagine a year ago are now realities.

Venezuela has formally started the process to restructure its foreign and PDVSA debt, which is viewed as a very important step toward reconnecting the country with international capital markets.

We're also seeing other things.

For example, Venezuelan public financial institutions are gradually reconnecting with international financial system.

We're seeing new discussions about redefining the role of the state in the economy and also important efforts to attract private investment into sectors that have been historically dominated by public entities in Venezuela.

All these developments, together with, of course, the US interest in supporting economic recovery and the participation of the private sector, have helped definitely to a very different business environment here in Venezuela.

At the same time, I would not describe the country as fully normalized.

Investors are still, of course, looking closely at regulatory developments, the implementation of these developments, and of course, the country's long-term stability.

So the way we describe it to clients is that Venezuela today presents many more opportunities than it did a year ago, but those opportunities still need to be approached with a clear understanding of the legal and operational environment we have right now.

Thank you.

And Margarita, if, if I could just stick with you for the moment.

Are the policy shifts and reforms that we're seeing, are they actually translating on the ground yet? Or is there still a gap between what I would describe as policy and reality?

Yes, we're already seeing the effects of these reforms on the ground.

There is greater investor interest, more commercial activity, a big increase in conversations around new projects.

For example, in sectors such as hydrocarbons, mining, and more recently electricity, where legal reforms are happening, US, European, Latin American companies are actively analyzing opportunities and already engaging with Venezuelan authorities.