Caracas [Venezuela], January 30 (HBTV): Venezuela’s National Assembly has approved sweeping changes to the country’s oil laws, granting foreign energy companies greater operational control and allowing sharply reduced royalties, a move that could significantly reshape the nation’s energy sector, The New York Times reported.
Lawmakers on Thursday enacted legislation permitting overseas firms to directly manage production projects, effectively reducing the role of state-run Petroleos de Venezuela, and allowing companies to resolve disputes through international arbitration instead of Venezuelan courts, according to the report.
The overhaul also enables authorities to lower taxes and royalties paid to the government, although Petroleos de Venezuela will remain under state ownership.
The New York Times reported that the move follows recent developments in which the US military captured former President Nicolas Maduro and replaced him with Vice President Delcy Rodriguez, who has since moved swiftly to open Venezuela’s oil industry to increased US participation amid pressure from Washington.
The reforms reverse key elements of Venezuela’s 2007 nationalisation drive, which had led major US oil companies to exit the country despite its vast oil reserves. That policy shift had been central to Chavismo, the political movement that has dominated Venezuela for nearly three decades.
Soon after the legislation was approved, the Trump administration announced it was easing sanctions on Venezuela’s oil sector, a decision expected to lift restrictions on transporting, storing, exporting and purchasing Venezuelan crude, The New York Times said.
While the reforms aim to attract foreign investment and revive oil production, critics have warned of long-term consequences. Former energy minister Rafael Ramirez said on social media, ‘In a single stroke, this wipes out nearly 70 years of our national achievements and seeks to cancel the country’s nationalist oil ideology.’
The report added that the new framework seeks to reassure investors by allowing disputes to be settled outside Venezuela, reflecting concerns over judicial independence. However, questions remain over legal stability and the durability of the reforms, given the country’s history of abrupt policy reversals.
The changes are expected to provide a short-term boost to Venezuela’s oil-dependent economy, which has struggled for years with falling revenues, infrastructure decay, expropriations and US sanctions. The government also organised rallies in Caracas on Thursday to demonstrate support for the overhaul as it seeks to draw both established companies and smaller operators back into the sector. (ANI)