Venezuela Opens Oil Sector to Privatization in Major Policy Shift

Venezuela’s acting President Delcy Rodríguez has signed a law opening the country’s oil sector to privatization. The reform gives private companies greater control over production and sales, allows independent dispute arbitration, and limits taxes and royalties. It marks a major shift from decades of state control and aims to attract foreign investment to revive the struggling oil industry, which is slowly recovering from underinvestment, mismanagement, and U.S. sanctions.

Venezuela’s acting President Delcy Rodríguez has signed a new law that will open the country’s long-state-controlled oil sector to privatization. The legislation, approved earlier in the day by the National Assembly, allows private companies greater control over the production and sale of oil and reduces the government’s monopoly over exploration. It also provides for independent arbitration of disputes rather than limiting resolution to Venezuelan courts, and sets taxes at a single contribution of no more than 15 percent on gross income, with royalties capped at 30 percent.
Lawmakers and officials have described the reform as a major step for the country’s economy. Orlando Camacho, head of the assembly’s oil committee, said the changes would transform Venezuela’s economic future, while Rodríguez emphasized that the law is about shaping a better future for the next generation. Analysts note that the law effectively dismantles the oil model established under Hugo Chávez, though the state will retain some discretion over issuing contracts to private companies.
The reform comes less than a month after the United States launched a military operation that led to the removal of then-President Nicolás Maduro, and amid ongoing U.S. efforts to gain access to Venezuela’s oil sector. Washington has encouraged U.S. oil executives to invest in the country as part of a proposed $100 billion plan to rebuild the oil industry, although so far investors have been hesitant to commit.
Venezuela has the world’s largest proven crude reserves, and while it was once a major oil producer and exporter, years of underinvestment, corruption, and mismanagement have weakened the industry. U.S. sanctions since 2019 have also contributed to the challenges. Production is slowly recovering, reaching 1.2 million barrels per day in 2025, up from 300,000 barrels in 2020, but still below the 3 million barrels per day achieved at the start of the century. The new law aims to attract foreign investment and accelerate the recovery of the oil sector while signaling a significant shift away from decades of state-controlled oil policy.