Venezuela: Exploitation of hydrocarbons in the State hands

Individual private R&D is not at odds with the government outline, but the Venezuelan state oil company will keep the bigger slice of the pie

On the brink of the 21st century socialism, there is small room for a private stake in the domestic oil industry. This is true for the changes to the Constitution proposed by President Hugo Chavez. However, some loopholes may be a future chance.
As stated in the proposed amendment to article 302, out of all the activities included in the oil business, the State will reserve only the exploitation of hydrocarbons. Such reserve has been established both in the relevant organic law and expressly in the Constitution.

Some lawmakers may think that, in line with the rationale provided by the President and based on the shift in the domestic oil policy, replacing the definition of reserve of “the oil business” with “exploitation of hydrocarbons” was a technical mistake. However, according to Rafael Ramirez, Minister of Energy and Petroleum and CEO of state-run oil holding Petroleos de Venezuela (Pdvsa), exploration by private companies is not inconsistent with the energy policy implemented thus far under the government of President Chavez.

He explained that, once marketability of an area at the end of the exploration stage is declared, the private party should enter into a partnership with Pdvsa. Then, the state company will take care of the operations, make the administrative decisions and keep the majority equity ownership in each of the joint ventures through the Venezuelan Petroleum Corporation (CVP).

El Universal