When you need two and a half years and $3.2 billion to recover the capacity you've lost in six months

After wasting precious trying to get a Colombian trucking company to drill oil wells, PDVSA signs a minimally credible deal to stanch the production hemorrhage.

PDVSA is back in contract-signing mode, following its…interesting experience with Trenaco earlier this year. Take it away, Reuters:

Venezuela’s state oil company PDVSA said on Wednesday it has awarded $3.2 billion in contracts to drill wells in the Orinoco Belt, although sources close to the matter said some foreign partners had complaints the tender was rushed and there were structural problems that could hinder projects.

The fresh discontent comes after Reuters reported in July that tiny Colombian trucking firm Trenaco, whose management was close to Venezuelan President Nicolas Maduro, won a multibillion-dollar contract to carry out similar work despite having no relevant experience. 

In a rare rebellion, foreign companies protested to PDVSA that Trenaco was vastly underqualified, leading to the cancellation of the $4.5 billion deal amid concerns about transparency and political favoritism.

The projects are designed to add 250,000 barrels per day (bpd) in 30 months, PDVSA said, as the crisis-hit OPEC country’s production slips due to low investment, maintenance problems, limited diluent imports, theft, and a brain drain.

(And, lest we forget…)

Oil production has already seen steep declines, with a cumulative drop of almost 230,000 b/d in January–June 2016, according to OPEC’s Monthly Oil Market Report (MOMR).