Venezuela's new energy law to allow private companies for first time

Venezuela's proposed new energy law would allow private companies to production, refining and commercialisation for the first time since the South American country nationalized the oil industry in 1975, according to Ignacio Arcaya, Venezuela's ambassador to the United States.
The new Hydrocarbons Law draft would modernize and unify Venezuela's energy laws for the first time since 1943, long before the country nationalized its oil assets, Arcaya said in remarks to the World Trade Centre of New Orleans. "For the first time since nationalization of the oil companies, it will allow US companies and other private enterprises to participate clearly and uncontrovertibly in 'primary activities' -- that is, exploration, extraction, transport by special means and storage of non-gaseous hydrocarbons," he maintained.
Arcaya explained that the proposed law would allow non-Venezuelan companies to participate in such oil activities as minority shareholders in mixed-capital entities that would be state andprivate partnerships. The provision also would eliminate a controversy surrounding Venezuela's interpretation of its nationalization law's fifth article, he added.

Domestic and foreign private interests also would be able to participate in the petroleum refining sector in Venezuela for the first time since nationalization under the proposed law, Arcaya said. Fully private entities, as well as mixed capital companies, would be eligible, he indicated.
"Finally, for the first time since nationalization, the commercialisation of certain products derived from natural hydrocarbons will be open to the private sector through both mixed capital and totally private companies," said Arcaya. "This law is moving forward under a kind of fast-track authority that has been a feature of Venezuelan constitutions for many years."
He noted that both the former constitutions and the new constitution enacted last year under President [Hugo] Chavez's leadership allow the national assembly to give the country's CEO expedited authority to prepare and decree laws on vital national economic matters. Arcaya said that Chavez has made the final deliberations and actions on the new hydrocarbons law a very open process.

The government posted the draft law on the worldwide web and invited comments not only from Venezuelan citizens, but also from business leaders who are potential operating partners and investors in the Venezuelan energy sector, the ambassador said.