Venezuela's Acting President Signs Law Reversing Decades of Socialist Oil Policy

Caracas. Venezuela's acting President Delcy Rodriguez signed a new law on Thursday concerning the reform of the country's oil industry. This law reverses socialist policies implemented for over two decades by granting a significant role to private companies in oil production and sales.

This reform is considered the government's most significant policy move. The state's strict control has been relaxed with the aim of attracting foreign investment into the long-troubled oil industry. This law was enacted within a month of former President Nicolas Maduro losing power following an alleged attack by US forces in the capital, Caracas.

Rodriguez signed the bill less than two hours after it was passed by the National Assembly. Around the same time, the US Treasury Department announced it was easing some oil-related economic sanctions imposed on Venezuela and moving forward with processes to expand the activities of American energy companies.

Rodriguez also held talks with US President Donald Trump and Secretary of State Marco Rubio. The US side has announced plans to regulate Venezuela's oil exports and monitor the revenue generated from them. Venezuela holds the world's largest proven crude oil reserves.

Under the new law, private companies can operate oil fields at their own expense and risk based on an approved business plan. This ends the monopoly of the state-owned PDVSA over production and pricing. Furthermore, it includes independent international arbitration, which is considered important for foreign investors.

The law limits the royalty rate to a maximum of 30 percent and allows the executive branch to determine the tax structure based on the nature of the project. Lawmakers from the ruling party claim this will bring positive changes to the country's economy. Opposition lawmakers, however, have urged the addition of transparency and accountability provisions.

Oil workers and supporters of the ruling party celebrated the passage of the bill at the parliament building. Previously, former President Hugo Chavez had kept the oil industry under strict state control, forming the basis for social programs.

However, the industry weakened due to falling oil prices, corruption, mismanagement, and US sanctions, leading to a deep economic crisis. The government states that the new reform attempts to emerge from that very crisis.