CARACAS (Dow Jones)--Venezuela President Hugo Chavez, who in recent years has nationalized dozens of foreign companies including oil firms, on Tuesday acknowledged his country needs investment from foreign oil companies.
"Investment and experience from foreign oil firms is necessary in Venezuela," he said. "We need it."
The frank remarks by Chavez, a declared anti-capitalist and Marxist, come ahead of Thursday's long-awaited Carabobo oil auction, where many major oil firms, including Repsol (REP, REP.MC), Chevron (CVX) and Japan's Mitsubishi, are expected to participate.
The auction is for seven oil blocks in eastern Orinoco region, which contains vast reserves of recoverable petroleum.
Drilling has already begun in some parts of the Orinoco, but the government hopes the promising blocks that are part of Carabobo will significantly boost output.
Venezuela produces some 2.3 million barrels a day of crude, according to independent estimates, while the Carabobo blocks alone could produce up to 1.2 million barrels a day by 2015.
Venezuela's economy is in recession and inflation was 27% last year.
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com

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