disclosed<\/a> the conversation during his cabinet\u2019s first meeting of the year. Trump said he was about to \u201copen up all commercial airspace over Venezuela\u201d. Since the US president, while ramping up pressure on the dictator Nicol\u00e1s Maduro, declared Venezuela\u2019s airspace \u201cclosed in its entirety\u201d, at least eight international airlines have suspended operations in the South American country.<\/p>\nTrump said big US oil companies were already on the ground in Venezuela carrying out site assessments for potential operations. He said they are \u201cscouting it out and picking their locations, and they\u2019ll be bringing back tremendous wealth for Venezuela and for the United States\u201d.<\/p>\n
The Trump administration also eased some sanctions on Venezuela\u2019s oil industry. The US Treasury issued a general licence authorising transactions involving the Venezuelan regime and the state-owned Petr\u00f3leos de Venezuela SA (PDVSA).<\/p>\n
Since the naval blockade to halt oil shipments on sanctioned vessels and the 3 January military operation that captured Maduro while leaving his entire cabinet in power, the US has taken control of Venezuela\u2019s oil exports and revenues, which the White House has said it intends to retain indefinitely to ensure the regime follows its foreign policy objectives.<\/p>\n
The US-supported changes to the hydrocarbons law were approved at first reading last week and underwent a fast-tracked \u201cpublic consultation\u201d process before being unanimously approved at the second and final reading on Thursday by the regime-loyal National Assembly.<\/p>\n
The new law stipulates that even when they are minority partners in joint ventures with PDVSA, private companies may exercise \u201ctechnical and operational management\u201d directly, breaking with the previous rule that required state control over operational decisions. It also provides for a possible reduction in royalty payments to the regime from 30% to as low as 15%.<\/p>\n
David Vera, an associate dean in the Craig School of Business, said the new law \u201cwas necessary, and overall a positive step. But it still falls short of what US oil companies need to commit capital at scale. Yes, there\u2019s more flexibility on royalties, taxes, arbitration, and commercialisation, but a lot of executive discretion and legal uncertainty remains.\u201d<\/p>\n
According to Jos\u00e9 Ignacio Hern\u00e1ndez, a legal scholar and researcher of Venezuela\u2019s oil industry who works with the consultancy Aurora Macro Strategies, the new law \u201cimproves some aspects of the previous draft by granting greater contractual stability to private investment\u201d, but it \u201cfails to address all the causes that led to the collapse of the oil sector\u201d.<\/p>\n
Venezuela holds the world\u2019s largest proven oil reserves but accounts for less than 1% of global production.<\/p>\n
The country was once the world\u2019s largest exporter after emerging as a major oil producer in the 1920s. Production was nationalised in the 1970s with the creation of PDVSA, which came under Hugo Ch\u00e1vez\u2019s control in the 2000s, when Maduro\u2019s mentor and predecessor dismissed most of its leadership and technical staff.<\/p>\n
After an initial boom under Ch\u00e1vez, production collapsed after years of mismanagement and corruption, compounded by US sanctions, falling from 3.4m barrels a day to about 1m.<\/p>\n
\u201cThe most troubling aspect of the new law is the lack of consultation and political dialogue,\u201d said Hern\u00e1ndez, noting that despite regime claims that more than 120 proposals were received during this week\u2019s fast-tracked process, there was no meaningful public debate.<\/p>\n
Gonzalo Escribano, who heads the energy and climate programme at the Elcano Royal Institute in Spain, said Venezuela\u2019s oil market would only become genuinely attractive to foreign investment after a democratic transition \u2013 something for which the US has yet to set a timetable.<\/p>\n
\u201cA transition to democracy is needed so that there is a legitimate government and all decisions taken and laws approved have a legitimate constitutional backing and cannot simply be reversed,\u201d said Escribano.<\/p>\n
Hern\u00e1ndez agreed: \u201cIt will be, I fear, a short-lived law.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Venezuela\u2019s congress has approved a bill making significant changes to the country\u2019s oil sector after pressure from the…\n","protected":false},"author":2,"featured_media":437825,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[23,3,21,19,22,20,25,24],"class_list":{"0":"post-437824","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-america","9":"tag-news","10":"tag-united-states","11":"tag-united-states-of-america","12":"tag-unitedstates","13":"tag-unitedstatesofamerica","14":"tag-us","15":"tag-usa"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/437824","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=437824"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/437824\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/437825"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=437824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=437824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=437824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}