Experts warn that a hydrocarbons overhaul passed by a non‑legitimate body is vulnerable to legal and political reversal.
Venezuelan Vice President Delcy Rodríguez presents the 2026 Budget Bill and the Special Annual Debt Law to the National Assembly, framing the measures as part of the country’s energy‑sovereignty strategy. (Embavenez SVG)
By Elio Ohep, EnergiesNet
PHOENIX
EnergiesNet.com 01 26 2026
The debate over Venezuela’s hydrocarbons framework has intensified as the authorities currently exercising de facto control move to rewrite the country’s oil law. The initiative is presented as a necessary step to attract foreign investment, particularly from U.S. companies, which argue that the existing legal structure makes large scale participation impossible. Yet the speed of the reform and the institutional fragility of the approving body raise fundamental questions about its long term validity.
The current hydrocarbons law, adopted in 2001 and reinforced in 2006, is anchored in two constitutional provisions. Article 302 reserves the petroleum industry to the Venezuelan State, and Article 303 requires that PDVSA remain entirely state owned. Under this framework, private companies may participate only through joint ventures in which PDVSA holds a majority stake and retains operational control. The law also establishes rigid fiscal terms, high royalties, and limited contractual flexibility. These conditions have discouraged the return of major international operators. For years, specialists such as Elisabeth Eljuri and Francisco Monaldi have warned that without legal certainty, modernized contracts, and a predictable institutional environment, no significant investment will materialize.
The reform now being advanced seeks to modify this structure by introducing more flexible participation mechanisms. Drafts circulating among industry observers suggest the incorporation of productive participation contracts, inspired by the Anti‑Blockade Law, which would allow private companies to assume a larger operational role. The proposal also appears to reduce PDVSA’s exclusive control in certain upstream activities and to grant the Executive broader discretion to negotiate terms, adjust fiscal conditions, and approve exceptions without full legislative scrutiny. These changes aim to create a more competitive environment and to signal openness to foreign capital.
Political actors abroad have taken positions that indirectly shape the debate. President Donald Trump recently stated that the United States intends to restore Venezuela’s capacity to produce and sell its oil in a way that benefits the Venezuelan people and stabilizes global markets, a message interpreted by analysts as support for rapid legal changes. In Washington, Senator Marco Rubio warned that any investment in Venezuela must be protected by a legitimate and stable government; otherwise, companies will face enormous political and legal risks. These statements reflect a broader concern that reforms enacted under a contested authority may not survive a future transition.
Oil executives have expressed cautious interest. Chevron representatives have reiterated that a predictable legal framework is essential for long term investment decisions, a position echoed by Repsol and Eni in public forums. These companies recognize Venezuela’s geological potential but remain wary of entering under uncertain legal conditions. Industry analysts participating in Davos roundtables, as reported in EnergiesNet’s recent coverage, noted that Venezuela’s reserves remain strategically important, but that no serious operator will commit capital without clarity on governance, legitimacy, and long term legal guarantees.
Another dimension of the debate is the position of Venezuela’s broader intellectual and technical community. Several well known writers and analysts who have studied the sector for decades have long warned that no hydrocarbons reform can succeed without institutional legitimacy. Former PDVSA board member Luis Pacheco has emphasized in multiple forums that Venezuela requires a transparent and constitutionally grounded framework capable of guaranteeing long term commitments. Gustavo Coronel, one of PDVSA’s original directors and a prolific commentator, has repeatedly argued that reforms enacted under unstable political conditions will not attract serious investors and are vulnerable to reversal. Luisa Palacios, former chair of the PDVSA Ad Hoc Board, has stressed that governance, credibility, and institutional rebuilding are prerequisites for any successful opening of the sector, noting that investors evaluate political stability before contractual terms.
Other respected voices have echoed similar concerns. José Toro Hardy has written extensively that Venezuela must restore clear rules and credible institutions before expecting meaningful investment, warning that the collapse of the sector is rooted in institutional deterioration rather than technical limitations. Diego González Cruz has highlighted that contractual flexibility is meaningless without transparency and depoliticized governance. Economist Rafael Quiroz Serrano has argued that any reform enacted under contested authority will face legal and operational challenges, while José Guerra has stressed that investors look first at political stability and rule of law, not just fiscal incentives. Francisco Rodríguez has similarly noted that Venezuela must establish a credible transition framework before expecting large scale capital inflows. Economist Ricardo Hausmann has also emphasized in his published work that the oil sector cannot recover without credible institutions capable of enforcing contracts and guaranteeing long term commitments, warning that reforms enacted without legitimacy lack durability.
Constitutional scholars have also weighed in. Allan R. Brewer‑Carías, one of the country’s most authoritative legal voices, has long argued that laws enacted by authorities lacking constitutional legitimacy are inherently voidable. Throughout his extensive academic work, he has emphasized that only a government with full constitutional standing can approve reforms that alter the structure of strategic sectors such as hydrocarbons. Brewer‑Carías has repeatedly warned that acts issued by bodies without legitimate authority lack constitutional validity and can be annulled once a legitimate institutional order is restored. His analysis directly applies to the current situation: any hydrocarbons law passed under a contested authority would face immediate vulnerability to judicial challenge and future reversal.
A striking element of the current debate is the silence of Venezuela’s main opposition politicians. Despite the magnitude of the proposed reform and its long term implications for the country’s economic structure, leading opposition figures have not articulated a clear position. María Corina Machado, the most prominent figure of the democratic opposition, has remained silent on the initiative, mirroring the broader opposition’s reluctance to engage publicly. Analysts suggest that this silence reflects the political sensitivity of the topic, the risk of appearing aligned with foreign interests, and the uncertainty surrounding the future legal status of any reform enacted under the present arrangement. As a result, the legislative process is unfolding without meaningful input from the country’s principal democratic actors, leaving a vacuum in the domestic political debate at a moment when the hydrocarbons framework is being fundamentally reshaped.
These combined perspectives reinforce a consistent message: Venezuela urgently needs a modern hydrocarbons framework capable of attracting investment, but such a framework cannot be built on a foundation of contested authority. As Elisabeth Eljuri has repeatedly warned, investors require stability, predictability, and alignment with international standards.
Sources: Reuters, AP, Bloomberg, BBC, VOA, OilPrice, EnergiesNet, St. Vincent Times, Public statements and published work of persons in the article.
Elio Ohep, editor@petroleumworld.com
EnergiesNet.com 01 26 2026
