Khaberni - The Venezuelan National Assembly approved on Thursday, under pressure from the United States, a reform of the hydrocarbon resources law that would open the sector to private companies and reduce taxes, allowing for more beneficial contracts for companies.
This reform, which will open the door to foreign investment, comes less than a month after the American military intervention in Venezuela, which resulted in the arrest of President Nicolas Maduro on January 3.
Jorge Rodriguez, the president of the National Assembly and brother of the acting Venezuelan president, Delcy Rodriguez, who succeeded Maduro, said "The reform of the hydrocarbon law was unanimously adopted in a historic step for our future and for our daughters and sons".
He continued, "I commend the workers in the oil sector who will implement the most important elements of this reform... We must build together, irrespective of our concept of the prosperity of our republic".
This reform will completely overturn the oil model inherited from the era of President Hugo Chavez (1999-2013).
Previously, the exploitation of the oil sector was monopolized by state companies or mixed companies in which the state owned a majority of the shares. In 2006, the Chavez government restricted private sector participation by imposing additional restrictions.
The new version of the law allows contracts that enable private companies to handle the exploitation, distribution, and marketing without state participation. This is expected to stimulate exploitation activities.
A unified maximum contribution of 15% will replace various taxes, in addition to royalties amounting to 30% of total revenues.
Venezuela, a prominent player in the global market and possessing the world's largest oil reserve, produces about 1.2 million barrels per day, according to authorities.
Due to rampant corruption and mismanagement, production declined from more than 3 million barrels per day at its peak in the early 2000s to 350,000 barrels in 2020.
Venezuelan oil remains subject to a ban imposed by Washington in 2019 during the first presidential term of Donald Trump.
