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Venezuela approves oil sector reform to boost private investment
Venezuela's National Assembly has passed a sweeping reform of the country's hydrocarbons law, granting private companies-including foreign firms-greater operational autonomy in the oil sector. The move aims to reverse years of decline in the industry, which holds the world's largest proven oil reserves but has suffered from mismanagement, underinvestment, and sanctions.
Key changes in the reform
The new legislation allows private companies to operate oil fields independently if they secure approved contracts. It also grants firms in joint ventures with state-owned PDVSA more control over projects and direct access to oil sale proceeds. Previously, PDVSA held majority control over all operations, a barrier that deterred foreign investors.
Analysts say the reform could attract companies that exited Venezuela after the sector was nationalized under former President Hugo Chávez in 2006. The changes mark a sharp departure from Chávez's policies, which tightened state dominance over oil production.
US eases sanctions, paving way for corporate return
Hours after the law's passage, the U.S. Treasury Department issued a general license authorizing a range of oil-related transactions, including refining by established American firms. The move follows pressure from President Donald Trump, who has urged U.S. oil companies to invest in Venezuela despite its unstable political climate.
Chevron, which has maintained operations in Venezuela under a special license, had previously called for legal reforms to facilitate greater private sector participation. The easing of sanctions coincides with ongoing U.S.-Venezuela negotiations over the sale of sanctioned oil, with Washington permitting the export of millions of barrels in recent months.
Funds tied to US oversight for public services
U.S. Secretary of State Marco Rubio stated that proceeds from Venezuelan oil sales will be deposited into an account in Qatar. Venezuela must submit monthly budgets to the White House, with funds released under U.S. sanctions controls for public services such as policing, sanitation, and medicine purchases.
"This reform is a critical step to revive our oil industry and attract the investment we desperately need," said National Assembly Speaker Jorge Rodríguez, brother of interim President Delcy Rodríguez.
Broader diplomatic and economic shifts
The reform's approval follows a dramatic shift in Venezuela's political landscape. Interim President Delcy Rodríguez assumed office this month after Nicolás Maduro was detained in a U.S. military operation. The National Assembly, dominated by Maduro allies, backed the bill as part of broader efforts to stabilize the economy.
In a related development, American Airlines announced it would resume flights to Venezuela for the first time in over six years, after the Trump administration lifted restrictions on U.S. carriers.
Uncertainty remains
While the reforms signal a potential turnaround, challenges persist. Many foreign firms claim they are still owed compensation for past contract changes. Years of underinvestment and crumbling infrastructure continue to plague the sector, and the political climate remains volatile.
Analysts caution that sustained investment will depend on further legal clarity and long-term stability, but the latest moves suggest a cautious thaw in Venezuela's isolation.
