Venezuela’s interim president Delcy Rodriguez has signed a law opening the country’s oil sector to privatisation.
The National Assembly approved the bill to lure in foreign investment on Thursday – as the US eased sanctions on Venezuela’s oil industry.
The move authorises US firms to buy, sell, transport, store and refine Venezuelan crude oil, but does not lift existing US sanctions on production. A White House official said more announcements on the easing of sanctions would follow.
Venezuelan legislators approved the overhaul of the country’s oil sector less than a month after a US military operation to seize former president Nicolas Maduro.
The legislation promises to give private companies control over the production and sale of oil, ending the monopoly of state-owned Petroleos de Venezuela SA.
A private company “will assume full management of the activities at its own expense, account, and risk, after demonstrating its financial and technical capacity through a business plan approved by” Venezuela’s oil ministry, under the new law.
The legislation will also allow for disputes to be settled independently, rather than through the Venezuelan courts, in a move that has been viewed as vital to guarding against future expropriation.
The revised law would also modify extraction taxes, setting a royalty cap rate of 30% and allowing the executive branch to set percentages for each project based on capital investment needs, competitiveness and other factors.
The reforms are expected to encourage increases in oil and gas production and foreign investment following a $100bn reconstruction plan for the industry proposed by US President Donald Trump this month.
Ms Rodriguez’s government expects the changes to serve as assurances for major US oil companies that have so far hesitated about returning to Venezuela.
Some of those companies lost investments when the ruling party enacted the existing law two decades ago to favour Venezuela‘s state-run oil company, PDVSA.
“We’re talking about the future. We are talking about the country that we are going to give to our children,” Ms Rodriguez said of the reforms.
The proposal was submitted, discussed and approved in less than two weeks.
Oil workers dressed in red jumpsuits and hard hats celebrated the bill’s approval, waving Venezuelan flags inside the legislative palace in Caracas.
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The White House has previously said it aims to control sales of Venezuela’s oil “indefinitely” as the Trump administration draws up plans for US oil companies to return to the nation.
The oil – worth upwards of $2bn (£1.48bn) – will be taken from storage by ships and brought directly to US unloading docks, the president said on on his social media platform Truth Social earlier this month.
Ms Rodriguez spoke with Mr Trump and US secretary of state Marco Rubio on Thursday.
Days earlier, Mr Rubio told a US Senate hearing how the administration planned to manage the sale of tens of millions of barrels of oil from Venezuela.
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Thursday’s events pave the way for yet another radical geopolitical and economic shift in Venezuela – which has the largest proven reserves of crude in the world.
Maduro’s predecessor Hugo Chavez made heavy state control over the oil industry a pillar of his socialist-inspired revolution. First-elected in 1998, he expanded social services, including housing and education, funded by oil revenues.
