Caracas, Venezuela: Venezuela’s parliament has advanced a proposal to loosen the state’s control over its oil industry and boost the private sector’s role in the first major overhaul of the industry in years.The proposal to reform Venezuela’s Hydrocarbons Law was thrust upon the country after the abduction of former President Nicolas Maduro by the United States on January 3 and had generated significant interest across businesses and political parties.Recommended Stories list of 4 itemsend of listIn the wake of those events, the White House and US Energy Secretary Chris Wright announced a $500bn energy agreement between the two countries, under which Washington seeks to exert significant influence over Venezuela’s oil industry.Approved in its first reading on Thursday, the reform breaks with several principles of the oil nationalisation carried out by former President Hugo Chavez in 2006, which reserved exclusive crude marketing rights for state-owned oil company PDVSA.The new text allows direct commercialisation by private companies, permits the opening of bank accounts in any currency and jurisdiction, and, while reaffirming PDVSA’s majority stake in joint ventures, allows minority partners to exercise technical and operational management.The bill also proposes repealing the law that reserves ancillary services related to primary oil activities for the state, allowing private companies to subcontract oil extraction, provided they assume the associated costs and risks.It further introduces flexibility in royalty payments, lowering them from 30 percent to as little as 15 percent of extracted crude as an incentive to attract invest …
