Venezuela’s interim President Delcy Rodriguez signed legislation restructuring the country’s oil sector, opening it to privatization. This move reverses a core policy of the socialist movement that has governed the nation for more than two decades.
Rodriguez’s policy shift, aimed at attracting the foreign investors needed to revamp the industry, comes less than one month after the U.S. captured Venezuela’s former dictatorial leader. The interim president, who served as Maduro’s vice president prior to his capture, faced pressure from the Trump administration, which had set its sights on Venezuela’s oil industry following the imposition of sanctions.
On Jan. 10, Trump hosted nearly two dozen top oil and gas executives at the . He stated that American energy companies would invest $100 billion to rebuild Venezuela’s “deteriorating” oil infrastructure and push production to record levels.
On the same day, Trump signed an executive order titled “Safeguarding Venezuelan Oil Revenue for the Good of the American and Venezuelan People,” blocking U.S. courts from seizing Venezuelan oil revenues held in American Treasury accounts.
“We’re discussing the future. We are talking about the country we will pass on to our children,” Rodríguez said of the reform, according to The Associated Press.
The legislation ends the state-owned Petróleos de Venezuela SA (PDVSA) monopoly over oil production, sales, and pricing, allowing private companies to take control, the AP reported.
The new law states that a private company “will assume full management of 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, according to the AP. However, the outlet added that the law retains government control over hydrocarbon reserves operated by private companies.
The law also permits independent arbitration of disputes, ending the requirement that they be settled in Venezuelan courts controlled by the ruling party, the AP reported. Additionally, it modifies extraction taxes, setting a royalty cap rate of 30%, the AP noted.
President and Secretary of State Marco Rubio spoke with Rodriguez on Thursday, the AP reported. The call came just one day after the secretary explained to senators how the administration planned to handle the sale of tens of millions of barrels of oil from Venezuela, the AP added. The outlet noted that Venezuela holds the world’s largest crude oil reserves.
“What we aim to do is transition to a mechanism that allows such sales to occur through a normal oil industry—one not dominated by cronies, nor by graft and corruption,” Rubio said at a Senate hearing on Wednesday.
The secretary stated that the U.S. would retain control of the oil revenue, with Venezuela submitting monthly budgets outlining its funding needs. Subsequently, the funds would be moved into an account over which the U.S. would have oversight. He explained that the money would not be in U.S. hands, but Washington would control its disbursement to ensure it benefits the Venezuelan people.