Venezuela enacts sweeping hydrocarbon reform to open oil sector

Venezuelan lawmakers and acting President Delcy Rodriguez on Thursday enacted a sweeping reform of the nation's hydrocarbon laws, significantly reducing the state's long-held oil monopoly and opening the energy sector to greater private and foreign participation.

The reform dismantles elements of the state monopoly, previously maintained by the state-owned giant Petroleos de Venezuela (PDVSA). Key provisions of the law include lowering taxes and royalties to ensure project competitiveness and giving private producers the autonomy to manage their own oilfields, handle asset transfers, and outsource operations without mandatory PDVSA majority control.

The law also requires that legal disputes be resolved in international or US courts rather than the Venezuelan judicial system.

The legal changes are a direct response to a proposed $100 billion reconstruction plan for the Venezuelan oil industry, championed by the Trump administration.

The initiative follows the Jan. 3 capture of Nicolas Maduro by US military forces.

On the same day the law was signed, the US Treasury Department issued a general license easing several sanctions on Venezuelan crude. The authorization allows US companies to lift, transport, and refine Venezuelan-origin oil, effectively opening the commercial "airspace" and maritime routes for trade between the two nations.

During a signing ceremony with state oil workers in the capital Caracas, Rodriguez hailed the reform as a "historic qualitative leap." She stated that the goal of the new law is to transform the world's largest proven oil reserves into "the greatest happiness" for the Venezuelan people by restoring the country as a leading global producer.