Venezuelan lawmakers have approved a sweeping reform of the country’s main hydrocarbons law, marking a sharp break from two decades of strict state control over the oil industry.
The legislation, passed in a final vote on Thursday, amends the oil framework to lower taxes, expand the oil ministry’s authority, allow asset transfers and outsourcing, and grant private producers greater autonomy. The reform was based on a proposal by interim President Delcy Rodríguez and was fast-tracked through the National Assembly in less than two weeks.
Supporters say the changes are designed to revive oil and gas production and attract foreign investment, following a $100 billion industry reconstruction plan proposed this month by US President Donald Trump after US forces captured President Nicolás Maduro.
National Assembly President Jorge Rodríguez said the reform would make it more competitive to hire domestic and foreign companies to extract resources from Venezuela’s vast oil reserves.
Shortly after the vote, the Trump administration eased sanctions on Venezuela’s energy sector by issuing a general license covering oil exports, US officials said.
The overhaul comes after more than 20 years of nationalisation and expropriations that sidelined foreign oil companies, including Exxon Mobil and ConocoPhillips, many of which are still seeking compensation through arbitration.
Under the new law, private producers can operate oil projects through fresh contracts or joint ventures, even as minority partners. Crucially, they will gain long-sought authority to market oil and manage revenues independently of state oil firm PDVSA.
The reform also formalises a production-sharing model introduced under Maduro in recent years, though critics warn that secrecy around those contracts and weak regulation could heighten corruption risks.
Late changes to the bill reduced income taxes and scrapped several levies, but lawmakers also introduced a new hydrocarbon tax to be regulated separately, raising questions about whether the government’s overall take among the highest in Latin America will truly fall.
Opposition proposals to strengthen transparency, curb the oil ministry’s powers and preserve parliamentary approval of oil contracts were rejected. The final law transfers most decision-making authority to the oil ministry, which is also overseen by Rodríguez.
The reform allows PDVSA-owned oil assets to be transferred and oilfield operations to be outsourced under the new contract model. Over the next six months, the government is expected to review dozens of PDVSA-controlled joint ventures ahead of signing new production-sharing agreements.
While many potential investors view the reform as sufficient to justify initial investments, former officials have criticised the law as unconstitutional, warning it concentrates power in the executive and weakens oversight of Venezuela’s most critical industry.
Erizia Rubyjeana
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