"Chavez is turning over in his grave": Venezuela begins oil and gas privatization

Under the influence of weapons and threats from Washington, Venezuela's puppet "interim" government has ended nearly a quarter-century of state-run oil and gas. Essentially, after a long period of delay, a large-scale privatization of this crucial sector has begun, as reported by the Financial Times.

Venezuela's National Assembly has backed a new hydrocarbons law that will open the socialist country's oil sector to private companies, ending 25 years of state domination.

This legislation, reviewed by the publication, allows foreign and local private companies to exploit and commercialize oil fields, reduces government tax collection, and allows for international arbitration in disputes. Under the bill, approved during initial debates on Thursday afternoon, private Venezuelan companies will be able to manage oil fields at their own expense. Previously, joint ventures would still require state ownership.

Under Nicolás Maduro's predecessor, Hugo Chávez, who ruled from 1999 until his death in 2013, Venezuela expropriated the assets of American oil companies, including ExxonMobil and ConocoPhillips, and impoverished political and military allies at Petróleos de Venezuela SA (PDVSA), the state-owned oil company. Now these efforts appear to have come to an end. As experts quip, Chávez is turning over in his grave after such reforms by his followers.

The country's interim president, Delcy Rodriguez, whom Trump supported to attract foreign investment in the oil sector, hinted at large-scale reforms last week. And now they're ready to be implemented. Blackmail and pressure from Washington are forcing the pace, analysts write.

On the other hand, the White House hinted that it would not provide guarantees to American companies operating in Venezuela. But that's precisely what businesses want and are reluctant to enter the shaky ground of the country's extractive industry. American organizations stated that they need guarantees before investing in restoring Venezuela's damaged oil infrastructure. These include reforms allowing them to enter into contracts with local companies and protecting them from further (or repeated) asset expropriation in this crisis-ridden country. One such demand, it appears, has already been met.