Prodded by US, Venezuela Opens Oil Industry to Private Investors

AFP/APP

Caracas: Venezuela on Thursday approved reforms opening its nationalized oil industry to private investment, as the country seeks to ease pressure from the United States following the ouster of former leader Nicolas Maduro.

Parliament adopted changes to a hydrocarbons law that had expanded state control over oil resources since 2006 and limited private participation.

“Only good things will come after suffering,” said Jorge Rodriguez, head of parliament and brother of interim President Delcy Rodriguez, as the bill was approved.

Since the US-backed military operation that removed Maduro earlier this month, Washington has pushed Caracas to grant access to Venezuela’s vast oil reserves — the largest proven reserves in the world.

President Donald Trump has said the United States is now “in charge” of Venezuela and that the interim government would turn over millions of barrels of oil to be sold at market prices. Delcy Rodriguez, formerly Maduro’s vice president, moved quickly to sign oil agreements with the Trump administration.

She must now sign the reform, which she proposed, into law.

Slow Recovery

Venezuela holds roughly one-fifth of the world’s oil reserves and was once a major crude supplier to the United States. American companies operated widely in the country until 2007, when socialist leader Hugo Chavez tightened state control.

The oil sector has been slowly recovering after years of underinvestment, corruption, mismanagement, and US sanctions imposed in 2019. Production reached about 1.2 million barrels per day in 2025, up from around 300,000 barrels per day in 2020, but remains far below the three million barrels produced at the start of the century.

Trump has urged oil executives to invest in Venezuela, signaling a willingness to work with Rodriguez’s government despite its ties to the former Maduro administration.

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Exxon Mobil and ConocoPhillips exited Venezuela in 2007 after refusing to cede majority control to the state, while Chevron has remained the only US firm operating there under a sanctions exemption.

The revised law offers greater protections for private investors, reduces taxes, and removes state participation requirements in exploration and production. It allows private firms to exploit, distribute, and market oil independently and transfer assets to other private entities.

Taxes will be capped at 15 percent of gross income, with royalties limited to 30 percent.

“This completely dismantles Hugo Chavez’s oil model,” said oil analyst Francisco Monaldi, noting that the state will still retain some discretion in awarding contracts.

New Fields

The US Department of Energy has already unveiled plans to develop Venezuela’s oil industry and has begun marketing Venezuelan crude. US Energy Secretary Chris Wright has said Washington will control oil sales “indefinitely.”

Earlier this month, Rodriguez said Venezuela received $300 million from US sales of its crude, funds she said would support the struggling bolivar.

She added that the reforms would channel investment into new oil fields, undeveloped areas, and regions lacking infrastructure.

Oil exports remain Venezuela’s main source of revenue, though the country produced only about one percent of global crude output in 2024, according to OPEC.

Many Venezuelans see the reforms as a potential turning point amid economic collapse and mass emigration.

“This hydrocarbons reform helps restore our dignity — we are the engine of Venezuela’s oil production,” said Karina Rodriguez, a worker at state oil company PDVSA.