Venezuela's National Assembly has approved comprehensive reforms to the nation's oil laws, marking a pivotal shift in its energy policy.

The changes grant foreign energy companies unprecedented operational control over production projects, significantly diminishing the dominance of the state-run Petroleos de Venezuela (PDVSA).

This legislation, enacted on Thursday, also permits authorities to slash royalties and taxes payable to the government, while keeping PDVSA under state ownership.

The reforms empower overseas firms to manage projects directly, reversing the heavy-handed nationalisation policies of the past. Disputes between companies and the state can now be settled through international arbitration, bypassing Venezuela's domestic courts. This provision addresses longstanding investor concerns about judicial independence and political interference.

The overhaul stems from dramatic recent political upheaval. The US military's capture of former President Nicolas Maduro, followed by the installation of Vice President Delcy Rodriguez, has accelerated these pro-foreign investment moves. Rodriguez has acted swiftly to align Venezuela's oil sector with Washington's demands, aiming to revive an industry crippled by sanctions and mismanagement.

These changes undo core tenets of the 2007 nationalisation drive under Hugo Chávez, which expelled major US oil giants despite Venezuela boasting the world's largest proven crude reserves. That era defined Chavismo, the socialist ideology that has shaped Venezuelan politics for almost three decades, prioritising state control over hydrocarbons.

In tandem with the legislative approval, the Trump administration announced the easing of US sanctions on Venezuela's oil sector. This lift targets restrictions on the transport, storage, export, and purchase of Venezuelan crude, potentially unleashing a flood of foreign capital and expertise.

Proponents argue the reforms will magnetise investment and resuscitate production, which has plummeted due to crumbling infrastructure, expropriations, and years of isolation. Venezuela's oil-dependent economy stands to gain a vital short-term boost, with rallies organised in Caracas to showcase public backing for the pivot.

Yet critics decry the move as a betrayal of national sovereignty. Former energy minister Rafael Ramirez lambasted it on social media, claiming it erases "nearly 70 years of our national achievements" and dismantles Venezuela's nationalist oil doctrine in one fell swoop.

Scepticism persists over the reforms' longevity. Venezuela's track record of sudden policy U-turns raises doubts about legal stability, even as the new framework promises investor safeguards. Smaller operators and established majors alike may hesitate without ironclad assurances.

The legislation reflects broader pressures on Rodriguez's interim government to stabilise finances amid economic collapse. By courting US participation, Venezuela seeks to repair ties fractured by sanctions, potentially transforming its energy landscape from pariah status to a viable partner.

ANI