situation report

Jun 12, 2019 | 19:20 GMT

1 min read

Venezuela: National Assembly Approves Upstream Oil Sector Reform

What Happened: The energy and oil committee of Venezuela's opposition-controlled legislature accepted a draft law allowing private companies to enter Venezuela's upstream oil sector without having to form a joint venture with state-owned energy company Petroleos de Venezuela, Yahoo Finance reported June 12.

Why It Matters: If the government of Venezuelan President Nicolas Maduro is forced from power, and an opposition-led administration replaces him, it will prioritize raising oil revenue. To do this, it would have to raise oil production by attracting foreign energy companies to invest. This will open up opportunities for investment in the upstream sector, largely for major international oil companies.

Background: The Maduro government has not recognized Venezuela's opposition-controlled National Assembly since 2016. Rather than hand control of the legislature to the opposition, Maduro chose to not recognize the body's authority over legislative matters. The legislature continues to debate and approve legislation, although its laws are not enforced by the national government.

Read More:
Venezuela: A Rapid Decline in Oil Production Raises the Risk of More Chaos (May 15, 2019)

Venezuela: Guaido Proposes Landmark Oil Reforms (March 13, 2019)

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