The National Assembly of Venezuela, with a government majority, unanimously approved this Thursday, the 29th, a partial reform of the hydrocarbons law that significantly reduces the rigid state control over oil operations, in force for the last two decades. The reform creates greater opportunities for the private sector and foreign investment and allows for the recognition of international arbitration in investment disputes.
The reform of the law, which will come into force when it is published in the Official Gazettewas promulgated shortly after by interim president Delcy Rodríguez in a televised event with oil sector workers.
The legal reform came almost four weeks after US military forces captured then-dictator Nicolás Maduro in an operation in Caracas.
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This law “reaffirms sovereignty over our energy resources,” said the president, confirming that she received a call on Thursday from US President Donald Trump and his Secretary of State, Marco Rubio.
In the conversation, it was reported that “within the framework of the work agenda that we discussed, we are taking important steps and we are talking about ending restrictions on Venezuela’s commercial airspace, allowing the entry of all the airlines that need to come and allowing the entry of the investors that need to come”, he added.
In parallel with the approval of the legal reform, the Treasury Department officially began easing sanctions on Venezuelan oil, which had seriously harmed the industry, and expanded the ability of American energy companies to operate in the South American country. This was the first step in the plans outlined by the American Secretary of State the day before.
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On Thursday, Trump also announced that he will reopen Venezuelan airspace to commercial flights. The measures taken by the two governments on Thursday are paving the way for another radical geopolitical and economic change in Venezuela.
The Trump administration continues its efforts to take control of Venezuelan exports of petroleum products, claiming this will benefit the Venezuelan people, as well as to revitalize the struggling sector by attracting foreign investment to the South American country.
Trump recently signed an executive order that aims to ensure that proceeds from the sale of Venezuelan oil remain protected from being used in lawsuits by its creditors. The law seeks to boost oil production and make direct royalty payments to the Venezuelan government more flexible.
The reform modifies and revokes a series of taxes on extraction, establishing a royalty limit of 30% and allowing the executive branch to define percentages for each project in the execution phase, based on capital investment needs, competitiveness and other factors.
According to information, the investor will assume operating costs and financing risks.
The Rodríguez government hopes the changes will serve as reassurance for major American oil companies that have so far been hesitant to return to the country. Some of these companies lost investments when the ruling party enacted the law, which had remained in force for two decades, to favor the state-owned Petróleos de Venezuela SA (PDVSA).
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The interim president has repeatedly stated that the law will be “respectful” of the country’s sovereignty, making it clear that the oil fields will remain the property of the Venezuelan state. She assured that it is “a clear law, with legal certainty, with regulations adapted to international practices in this sector”.
Despite having one of the largest oil reserves in the world – estimated at around 303 billion barrels, according to the US Office of Energy Information – Venezuela faces a long-standing crisis, worsened by the continued deterioration of its economy and the collapse of its oil industry, the main source of its foreign currency earnings.
Government critics attribute the sector’s collapse to mismanagement and corruption at PDVSA during the socialist governments of President Hugo Chávez (1999-2013), Maduro’s predecessor and political mentor.
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Opposition deputy Antonio Ecarri urged the assembly to add provisions on transparency and accountability to the law, including creating a website to make financing, contracts and other documents and management reports public. Ecarri emphasized that these provisions could also be considered judicial safeguards.
These guarantees are among the main changes foreign investors look for when considering entering the Venezuelan oil market.
PDVSA’s finances have also been affected in recent years by falling oil prices, huge foreign debt and US sanctions.
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In August 2006, the Chávez government carried out a law reform that promoted the creation of joint ventures in the oil sector, reversing operational agreements and replacing them with partnerships with the state oil company PDVSA, in which it maintained majority control of the projects.
While companies like ExxonMobil and ConocoPhillips left the country and went to court in the face of the wave of nationalizations, companies like Chevron, among others, accepted Chávez’s offer to create a company together with PDVSA on terms that seemed unfavorable.
The reform included the repeal of several laws, including one that regulated private participation in primary oil exploration activities and another that established unfavorable terms and conditions for the creation and operation of mixed companies.
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*This content was translated with the help of Artificial Intelligence tools and reviewed by the editorial team of Estadão.
