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Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

PDVSA spent the past 15 years as the gift that kept on giving. The death of Hugo Chavez offers an opportunity for Venezuela's energy champion to revert to being – well, just a national oil company. If revolutionary fervour could turn oil into money, Venezuelans would be the world's richest people. But what PDVSA really needs is a capitalist reality check. If it wishes to extract maximum value from its matchless oil and gas reserves, Venezuela needs to attract foreign investment.

PDVSA's decline has been painful to see. True, revenue ballooned to $125-billion (U.S.) in 2011 from $42-billion a decade earlier, according to Bloomberg data. But that was a function of a soaring oil price and the relentless rise of Venezuela's official proved reserves of oil, now estimated at 300 billion barrels. The more telling statistic is production, which was at least 12 per cent lower in 2011 than in 2001, according to BP numbers.

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Mr Chavez sacked 20,000 PDVSA workers in 2002, including many of its best engineers and managers. Some went to Colombia. Check out the success of Pacific Rubiales Energy to see what they have since achieved. Venezuela needs to lure some of them back home. He also rewrote production agreements that made life a bit more difficult for international oil companies. But Repsol, for example, produced 36,000 barrels a day in Venezuela in 2012, or 11 per cent of the group total.

Many other internationals are present in Venezuela – Chevron, Eni and Total among them. A new administration should hug them more closely, not least because it needs their money. PDVSA's upstream investment fell 20 per cent in 2012 over 2011, according to Barclays. That is unforgivable in a world of $115 oil – and in a country with so much poverty and so much capacity to alleviate it. PDVSA is most valuable to Venezuela as an oil and gas producer, not an instrument of social engineering.

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