Venezuela, Bolivarian Republic of
Allows private participation in primary hydrocarbons activities
29 Jan 2026
On 29 January 2026, the Law Partially Amending the Organic Hydrocarbons Law of the Bolivarian Republic of Venezuela was published in Official Gazette No. 6,978, Extraordinary. The reform amends the legal framework governing primary hydrocarbons activities, which, under the previous regime, could be carried out only by State-owned enterprises and mixed enterprises.
The reform introduces new modalities for private participation. First, private companies domiciled in the Bolivarian Republic of Venezuela, including foreign-owned companies incorporated under domestic law, may participate as minority shareholders in mixed enterprises, in which State entities must retain an equity participation of more than 50 per cent. Second, State-owned enterprises and their subsidiaries may enter into operating or production contracts with private companies, under which the private contractor may assume technical, operational and financial management at its own cost and risk.
The reform also replaces the requirement for prior approval by the National Assembly of the incorporation and operating conditions of mixed enterprises with authorization by the National Executive.
In addition, the reform:
(a) Strengthens protections for minority shareholders in mixed enterprises through enhanced governance rights and shareholder dispute resolution mechanisms;
(b) Allows hydrocarbons-related contracts to include international arbitration and other alternative dispute resolution mechanisms;
(c) Exempts mixed enterprises and private contractors from public procurement rules and permits direct commercialization under defined conditions;
(d) Revises the fiscal framework, while preserving the State’s right to royalties of up to 30 per cent of extracted hydrocarbons, with rates set on a project basis and adjustable within that ceiling to preserve project economic equilibrium.
Nature of measure:
-
Liberalization
-
Other regulatory changes
Type:
-
Entry and establishment (Ownership and control, Approval and admission - other)
-
Treatment and operation (Dispute settlement, Operational conditions)
Industry:
-
Primary (Mining and quarrying)
Inward FDI:
Yes
Outward FDI:
No
Sources:
