The interim president of Venezuela, Delcy Rodríguez, has signed a law that opens the oil industry in Venezuela to private investors, marking a radical shift after more than two decades of state socialist dominance. This measure, approved by the National Assembly, comes less than a month after the capture of Nicolás Maduro in a US military operation in Caracas.
US Sanctions Relaxation
Meanwhile, the US Department of the Treasury initiated the relaxation of sanctions on Venezuelan oil, allowing US energy companies to operate in the country. This license explicitly excludes transactions with entities from China, Russia, Iran, North Korea, or Cuba, aligning with plans announced by Secretary of State Marco Rubio. “We’re talking about the future. We’re talking about the country we’ll give to our children”, Rodríguez declared during the signing.
Key Changes in the Oil Industry in Venezuela
The new legislation grants private companies control over oil production and sales, along with independent arbitration for disputes, eliminating the obligation of Venezuelan courts controlled by the government. A maximum royalty rate of 30% is established, adjustable by project according to investment and competitiveness needs. This aims to attract oil companies like ExxonMobil and ConocoPhillips, which lost billions in expropriations under Hugo Chávez in 2006.
Reactions and Economic Expectations
Officialist deputy Orlando Camacho stated that this reform “will change the country’s economy”. Opponents like Antonio Ecarri demanded transparency, proposing a public website for funding and data to combat systemic corruption. Oil workers, with red jumpsuits and hard hats, celebrated the approval waving flags in the legislative palace.
Venezuela, with the world’s largest proven oil reserves, saw its oil industry in Venezuela collapse due to poor management, price drops, and sanctions since 2014, driving the emigration of seven million people. The proposal also responds to statements by President Donald Trump about taking control of exports to revitalize the sector.
- Private control in production and sales.
- International arbitration for investors.
- Flexible royalties up to 30%.
Experts highlight that these adjustments could recover the competitiveness of Petróleos de Venezuela S.A. (PDVSA), eroded since the high oil prices in the 2000s. The oil industry in Venezuela now faces a rebirth with foreign investment, although challenges persist due to political volatility.
