The petro is pegged to the price of one barrel of Venezuelan oil and is supposed to be backed by oil reserves in a 380-square-kilometer bloc known as Ayacucho I which the government claims to hold 5.3 billion barrels. Whether the claim is true or not, huge investments in infrastructure will be needed to develop the remote area to access any oil it may hold and the Venezuelan government is in no position to deliver on that in its current state.
Reporters visited the town of Atapirire, located in the bloc, and only found crumbling roads, abandoned old oil pumps and residents complaining about power outages and hungry kids. And a former oil minister that served for ten years under President Hugo Chavez and now lives in exile, Rafael Ramirez, recently estimated it would cost at least $20 billion to access the promised reserves. “The petro is being set at an arbitrary value, which only exists in the government’s imagination,” Ramirez stated.