Venezuelan MPs approve bill to open up oil sector to private firms

Venezuela's National Assembly has approved a reform of the country's hydrocarbons law that will allow private companies, including foreign firms, more autonomy in the country's lucrative oil sector.

Once the law is signed off by the country's interim president, it is expected to pave the way for more foreign investment in the oil industry.

US President Donald Trump has been pushing US oil companies to invest in Venezuela's vast oil reserves, despite decades of mismanagement, under-investment and a still uncertain political climate.

But one of the barriers for investors had been the existing framework that gave the state oil company PDVSA majority control over operating oil projects.

Venezuela has the largest proven oil reserves in the world, but many foreign firms left after the industry was first nationalised, and then years later state control over production was tightened further.

Some firms say they are still owed compensation after these changes were made to their contracts.

Despite the huge reserves, the industry there has suffered after years of mismanagement and under-investment in the infrastructure, as well as heavy sanctions including by the US.

This new reform would allow private firms to operate oil fields if they had approved contracts and would give companies in joint ventures with the state firm PDVSA more control over projects and more direct access to proceeds from oil sales.

Existing international partners, such as the US firm Chevron which has continued to operate in Venezuela despite US sanctions due to a special licence, have previously requested reforms to the law.

The assembly, dominated by lawmakers who are allies of former president Nicolás Maduro, passed the bill with the backing of interim President Delcy Rodríguez, who assumed office after Maduro was seized in a US military operation earlier this month.

National Assembly speaker Jorge Rodríguez, Delcy Rodríguez's brother, urged lawmakers to support the reform as part of efforts to attract foreign investment.

The changes mark a significant shift from the 2006 hydrocarbons law introduced under former president Hugo Chávez, which tightened state control over the sector.

Analysts say the reform could help attract back foreign oil companies that had largely withdrawn from Venezuela in recent years.

The vote comes amid US-Venezuela negotiations over the sale of sanctioned Venezuelan oil, with Washington licensing the export of tens of millions of barrels.

US Secretary of State Marco Rubio has said the proceeds will be sent to an account, initially in Qatar.

He said Venezuela would submit monthly budgets to the White House and funds would then be released under US sanctions controls for public services in Venezuela such as policing, sanitation workers, and to buy medicines.