Venezuela opens oil sector to privatization in major policy shift
Kyiv • UNN
Acting Venezuelan President Delcy Rodriguez has signed a law allowing the privatization of the oil sector, overturning a socialist principle. This paves the way for foreign investment and the revitalization of the industry.
Acting President of Venezuela, Delcy Rodriguez, on Thursday signed a law that opens the country's oil sector to privatization, overturning a principle of the self-proclaimed socialist movement that has ruled the country for over two decades, AP reports, writes UNN.
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This reform, the publication writes, will undoubtedly become a key policy of her government, as she positions the oil sector - Venezuela's engine - to attract the foreign investment needed to revive the long-suffering industry. Rodriguez passed the law less than a month after the audacious capture of then-President Nicolas Maduro in a US military attack in the Venezuelan capital, Caracas.
Rodriguez, in the presence of oil workers and ruling party supporters, signed the bill less than two hours after its approval by the country's National Assembly. At the same time, the US Treasury Department officially began easing strict economic sanctions on Venezuelan oil, imposed by the first Trump administration, and expanded opportunities for American energy companies to operate in the South American country.
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On Thursday, Rodriguez also held talks with US President Donald Trump and US Secretary of State Marco Rubio, who explained to American senators at a hearing the day before how the administration plans to organize the sale of tens of millions of barrels of oil from Venezuela and control the movement of funds. Venezuela has the world's largest proven oil reserves.
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The actions of both governments pave the way for another radical geopolitical and economic shift in Venezuela, the publication writes.
"We are talking about the future. We are talking about the country we will give our children," Rodriguez said of the reform.
Rodriguez proposed these changes earlier this month, after Trump stated that his administration would take control of Venezuela's oil exports and revive the ailing industry by attracting foreign investment.
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The legislation promises to give private companies control over oil production and sales, ending the monopoly of the state-owned company Petróleos de Venezuela SA on these activities, as well as on pricing.
Under the law, a private company will take full management of operations at its own expense, at its own risk, and after demonstrating its financial and technical capabilities through a business plan approved by the country's Ministry of Oil. The legislation stipulates that ownership of the hydrocarbon fields where the company will operate remains with the state.
The new law also provides for independent arbitration of disputes, eliminating the requirement to resolve disagreements exclusively in Venezuelan courts, which are controlled by the ruling party. Foreign investors consider the participation of independent arbitrators crucial for protection against future expropriation.
Rodriguez's government expects these changes to provide guarantees for major American oil companies, which have so far been hesitant to return to the unstable country. Some of these companies lost investments when the ruling party passed the current law two decades ago in favor of Venezuela's state oil company PDVSA.
In addition, the revised law changes production taxes, setting a maximum royalty rate of 30% and allowing the executive branch to set percentages for each project based on capital investment needs, competitiveness, and other factors.