HOUSTON: A proposed reform of Venezuela’s oil law is enough to encourage companies working in the country to expand and for some new entrants to begin investing, but deeper reforms would be necessary to attract the US$100bil the United States says is required to revamp the nation’s energy sector, foreign and local executives and lawyers say.
The United States has taken control of Venezuela’s oil exports and revenue following a military incursion to capture President Nicolas Maduro earlier this month, and a naval blockade to stop oil shipments on sanctioned vessels since December.
Oil is the Venezuelan government’s main source of revenue. Washington has said it plans to control the country’s energy resources and revenue indefinitely to ensure Caracas governs in a way that the United States considers is in line with its foreign policy targets.
US President Donald Trump is pushing US oil companies to invest massively in the country’s dilapidated industry to reverse decades of mismanagement and underinvestment.
For many investors, one of the biggest obstacles to secure capital for Venezuela is a long-standing legal framework that gives state-run oil company PDVSA a monopoly on operating projects in the oil and gas sector. Interim President Delcy Rodriguez proposed a sweeping reform to the hydrocarbon law last week.
Venezuela’s authorities discussed it on Monday with lawmakers and oil executives from firms including US producer Chevron and India’s ONGC, sources close to the talks said. It is expected to be approved soon after the brief consultations.
Chevron did not reply to a request for comment. ONGC could not immediately be reached for comment after working hours. — Reuters
