Venezuela's interim government led by congress head Juan Guaido is preparin...
HOUSTON - Venezuela’s interim government led by congress head Juan Guaido is preparing new legislation to reverse late President Hugo Chavez’s energy industry nationalization, allowing private companies a bigger role in its oilfields and shrinking state-run PDVSA, according to sources and a draft seen by Reuters.
Under the proposal, which is expected to be released in coming days, private firms could choose to run the day-to-day operations of Venezuelan oilfields, a sharp departure from the Chavez era in which foreign companies could only be minority shareholders and were not granted operational control. “The Venezuelan oil industry has collapsed after years of arbitrary policies that turned PDVSA and its subsidiaries into political tools serving the Socialist model,” according to the preamble to the law.
“All hydrocarbon reservoirs can be part of an auction to be decided by Venezuela’s Hydrocarbon Agency,” the draft says.Venezuela’s National Assembly is expected to discuss the draft in the coming months, according to the sources. Once it is approved, there would be additional legislation required to fully reform the oil industry.
Chavez led a long nationalization wave that expropriated ConocoPhillips and Exxon Mobil Corp operations. Those two and others have won billions of dollars in international arbitration claims. “The collapse of public finances on top of the demands from a complex humanitarian emergency stop the state from taking responsibility for all the investment,” the proposed law says.
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