Chavez victory mixed outcome for Venezuela energy sector

In Venezuela, President Hugo Chavez has been reelected to a new six-year term. He had 54 percent of the vote; much closer than he’s gotten used to during his 14 years in office. The young challenger signalled he will continue to lead the political opposition.

Federico Barriga, a London-based analyst at the Economist Intelligence Unit, says that despite the close elections, Chavez’s “margin of victory was big enough that there is no reason to think that he will take a different stance.” Barriga notes that there is a chance that the election may give way to even more radical policy from Chavez.

For international investors and Venezeulan producers, “it is a bit of mixed outcome, Venezuela does need foreign investment in the energy sector to sort of boost production,” says Barriga, “but the business environment is definitely not going to improve in the next six years.”