Oil sector in Venezuela opens up for foreign investments and privatization

By E.C.V. & ASOCIADOS

In its annual accountability speech, Venezuela’s President Nicolás Maduro stated that the government will welcome foreign investment for the oil sector as part of a plan of increasing production up to 1.5 million barrels per day. 

The first hints of the plan came into place in October 2020 after the Constitutional Assembly voted the granting of a series of extraordinary economic policy powers for Maduro. Among other things, the legislation modified regulations related to joint ventures in the Venezuelan public oil industry.

According to Anadolu Agency foreign investment in Venezuela’s oil sector is capped at 49% of the investment in each new oil project, but under the new proposal, foreign companies could now manage and even fully own the sector, resulting in its privatization.

“The anti-blockage law will also allow the free trade of strategic goods, particularly fuel, which would be beneficial for the Venezuelan economy, as the country has been experiencing chronic fuel shortages because of Maduro’s mismanagement of the oil sector as well as United States energy sanctions on PDVSA,” the Venezuelan state-owned oil and natural gas company, Anadolu Agency reported.