Reforma de la Ley de Hidrocarburos: un paso importante, pero insuficiente para atraer grandes inversiones Venezuela’s National Assembly has approved a partial reform of the Organic Hydrocarbons Law in its first discussion, aiming to encourage private investment in the struggling oil sector. While the reform introduces some changes, experts suggest it falls short of what’s needed to attract significant foreign capital and fully revitalize the industry. The proposed changes are seen as insufficient without broader institutional reforms and a new, comprehensive hydrocarbon law.

• The National Assembly approved a partial reform of the Organic Hydrocarbons Law, comprising 18 articles and three transitional provisions.
• Experts argue the reforms are insufficient to attract substantial investment and revive the national oil industry, advocating for a new law and institutional reinstitutionalization.
• The reform introduces changes to allow for alternative dispute resolution mechanisms, potentially offering greater legal security for companies.
• The State retains majority shareholding in mixed companies, though the exact percentage is unspecified, and private entities can now engage in primary activities under contracts with state-owned companies.
• Royalties and extraction taxes have been made more flexible, potentially decreasing under certain conditions for private contracts and mixed companies.
• The reform removes the requirement for National Assembly authorization for the creation of mixed companies, with the Executive only needing to notify Parliament.
• Experts believe that despite some flexibilization, the core structure of the oil industry’s framework remains unchanged, and substantial long-term investment is still unlikely.
• The article notes Venezuela’s declining oil production and highlights the need for significant capital investment and a return to institutional stability to reach previous production levels.