Venezuela’s National Assembly has approved a major overhaul of the country’s hydrocarbons law, clearing the way for greater private sector participation in the oil industry and potentially unlocking new foreign investment in the world’s largest proven crude reserves.
The reform, once signed into law by interim President Delcy Rodríguez, will loosen longstanding restrictions that gave state-owned oil company PDVSA majority control over oil projects.
Under the new framework, private firms — including foreign companies — will be able to operate oil fields through approved contracts, gain more operational autonomy in joint ventures, and access proceeds from oil sales more directly.
The move comes amid renewed US engagement with Venezuela’s energy sector.
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Shortly after lawmakers passed the bill, Washington eased sanctions on Venezuelan oil operations, with the US Treasury issuing a general licence allowing a wider range of oil-related transactions, including refining activities by established US entities.
US President Donald Trump has been urging American oil companies to re-enter Venezuela despite lingering political uncertainty and years of underinvestment in infrastructure.
Venezuela’s oil industry has struggled for decades following nationalisation, tighter state control under former president Hugo Chávez, and prolonged sanctions that drove many international companies out of the country.
Several firms have maintained that they are still owed compensation from earlier contract changes, while production capacity has deteriorated sharply due to mismanagement and capital shortages.
Supporters of the reform argue that easing PDVSA’s dominance is essential to reviving output and attracting capital back into the sector.
National Assembly Speaker Jorge Rodríguez called on lawmakers to back the bill as part of broader efforts to restore investor confidence, while existing partners such as Chevron — which has continued limited operations under a special US licence — have long pushed for regulatory changes.
The legislation marks a decisive shift away from the 2006 hydrocarbons law that entrenched state control and restricted private involvement.
Analysts say the reforms could encourage oil majors to return, particularly as the US and Venezuela negotiate the sale of sanctioned oil volumes under strict monitoring arrangements.
As part of those negotiations, US Secretary of State Marco Rubio said proceeds from Venezuelan oil sales would be held in a monitored account, initially in Qatar, with funds released under sanctions controls to support public services such as healthcare, sanitation and policing.
In a separate sign of thawing relations, American Airlines announced it would resume flights to Venezuela for the first time in over six years, following the lifting of US travel restrictions.
