Key facts
- Venezuela's amended law offers hydrocarbon productive participation contracts, restructured PDVSA joint ventures and direct infrastructure and oilfield services contracts.
- Under a participation contract, a Venezuela-incorporated company operates an area at its own cost and risk for 25 years and may sell its output directly.
- Combined royalty and tax rates range from 20% for greenfield infrastructure to 35% for existing operational brownfield assets.
- The July regulations cap royalties at 30% and the integrated hydrocarbons tax at 15%, with reductions of up to five percentage points for offshore or refining projects.
- PDVSA aims to lock in 105 new oil contracts by the end of 2026, according to the report.
- The September 2 US-Venezuela deal covers 65 billion barrels of proven reserves across 17 fields for 100 years, with North American Blue Energy Partners holding a 35% US Department of War equity stake.
Venezuela's amended Organic Hydrocarbons Law lets foreign companies take exclusive control of oil and gas assets, ending the majority state control model established under former president Hugo Chávez and continued by former president Nicolás Maduro, vice minister of commercial policy Ricardo Gomez said during and after the Venezuela Global Investment Forum 2026.
The framework was written in January and clarified with fiscal regulations in July, but the forum was the first time the new government laid out the tiered fiscal rates on a major international stage, according to the report. State oil firm PDVSA is pushing to lock in 105 new oil contracts by the end of 2026.
Investors can choose between hydrocarbon productive participation contracts, restructured joint ventures with PDVSA, and direct contracts covering infrastructure and oilfield services. Under a participation contract, a company incorporated in Venezuela operates a designated area at its own cost and risk for 25 years and, with ministerial approval, may sell its share of produced oil and gas directly to international buyers, bypassing PDVSA's trading desks.
Combined royalty and tax rates range from 20% for new infrastructure and unexplored land to 25% for Orinoco Belt extra-heavy crude, 30% for defunct or heavily damaged non-producing brownfield sites and 35% for existing operational brownfield assets. The July regulations cap royalties at 30% and the integrated hydrocarbons tax at 15%, with reductions of up to five percentage points for qualifying offshore projects and developments with upgrading or refining infrastructure.
Eni transferred its Junín-5 heavy-oil field, with 35 billion barrels of certified oil in place, to a participation contract in September, moving from a minority joint venture position to exclusive operator.
The report flags structural hurdles: Western investment must still align with US Treasury (OFAC) general licences that could be revoked, reviving mature fields or raising refining throughput from 350,000 to 600,000 barrels per day requires billions in upfront capital, and Venezuela remains largely cut off from international banking and debt markets.