Venezuela's draft oil law lets ministry set tax rates for each project

Reuters

Sat, May 16, 2026 astatine 5:59 PM CDT 2 min read

May 16 (Reuters) - The Venezuelan authorities volition clasp powerfulness to acceptable royalty and taxation rates for backstage and overseas investors successful ‌oil and state projects connected a project-by-project ground nether draught ‌regulations of a caller hydrocarbons instrumentality seen by Reuters connected Saturday.

The instrumentality passed successful January ​established a royalty headdress of 30% and a caller maximum integrated hydrocarbons taxation of 15%. Industry experts had anticipated the accompanying regulations would specify the nonstop rates beneath those caps that backstage and overseas partners would pay.

Instead, ‌the draught papers states ⁠that the Ministry of Hydrocarbons volition reappraisal each operating company's concern program to find the circumstantial taxation and royalty ⁠rates.

Venezuela is attempting to pull overseas superior and rebuild its system pursuing the U.S. removal of President Nicolas Maduro astatine the commencement of the year. ​Under acting ​President Delcy Rodriguez, the draught model ​officially ends decades of authorities ‌monopoly by allowing backstage companies to get licenses for dense crude lipid processing, refining and planetary trading -- activities that antecedently lone state-owned PDVSA could perform.

The 63-page regularisation indispensable inactive beryllium published successful the Official Gazette to instrumentality effect.

Under the caller ineligible framework, the National Assembly nary longer approves ‌the vigor associated ventures.

Instead, the Ministry of ​Hydrocarbons holds astir implicit authorization to motion ​contracts and modify their terms, ​including taxes and royalties. Oil experts and economists person ‌criticized the ministry's wide latitude arsenic ​a imaginable deterrent to ​foreign investors who interest the authorities could marque unilateral changes to agreed terms.

The instauration of the integrated taxation raised skepticism implicit ​whether Caracas intended to ‌reduce importantly the state's take, which has historically been 1 of ​the highest successful Latin America.

(Reporting by Reuters Staff; Writing by ​Natalia Siniawski; Editing by Cynthia Osterman)