Over more than a century, Venezuela has gone through several models for managing its oil industry: concessions, the 1975 nationalization, the liberalization of the 1990s, and the subsequent strengthening of state control. However, the current situation differs fundamentally from the conditions of the past: the industry has faced years of underinvestment, the nationalization of assets, the destruction of infrastructure, an exodus of specialists, and financial restrictions. As a result, major international companies are no longer showing the same interest in Venezuela as they did during the previous oil reform.
Recovery must rely not only on the major players that remain, but also on small and medium-sized domestic and foreign companies capable of providing capital, technology, and operational capacity. The new law provides for production-sharing contracts in the hydrocarbons sector, allowing cooperation arrangements involving PDVSA and the relevant ministry to be negotiated on a case-by-case basis. This model could accelerate the return of production, the repair of facilities, and the restoration of markets, provided investors are guaranteed transparent rules, reasonable returns, and protection for their investments.
The state should retain ownership of natural resources and regulate the industry, while the private sector can assume responsibility for financing, technology, and commercial risks. PDVSA must become an efficient and predictable partner, while legal stability must include clear obligations, mechanisms for recovering investments, and procedures for resolving disputes. At the same time, industry development must benefit the entire country by creating jobs, supporting Venezuelan suppliers, expanding technical education, and developing local equipment manufacturing. The success of this new stage should be measured not by statements, but by actual investment, restored wells, increased production, and the participation of domestic businesses.
Full version: Realities in a New Oil Era