In Night D, the petroleum engineer Einstein Villa Macías warns that the reform of the Hydrocarbons Law opens room for greater discretion of the Executive and weakens the role of the State in the oil business. He maintains that the project may imply a reduction in tax revenue, unconstitutionality and an additional blow to the state economy.
Petroleum engineer Einstein Villa Macías is an open critic of the proposal to reform the Hydrocarbons Law approved in first discussion by the National Assemblyand focuses its criticism on three axes: sovereignty, possible violations of the Constitution and a drop in income for the State.
The petroleum engineer, former manager of PDVSA and with experience in international companies such as Pemex, Shell or Kuwuait Oil, maintains that the country should have known and debated the content of the project before its legislative advance. In his opinion, the fact that it was mentioned that the text was first discussed with the US places the discussion in a sensitive terrain for institutionality: «Sovereignty and national interest are not being respectedhe stated, while calling for the reform to be reviewed and “consultated” with citizens.
“Total discretion” and less control
One of the points that Einstein Millán Arcia highlights is the reduction of parliamentary control over the sector, by passing -according to what is stated in Night D of SuchWhich— from an authorization scheme to one of simple notification in the creation of mixed companies. Villa Macías warned that this opens the door to what he described as “total executive discretion”which, in his opinion, weakens institutional counterweights in a strategic area.
He also questions whether the private partner can gain more powers in the operation, marketing and export of crude oil. “They have the power to export and market our crude oil,” he said, warning that PDVSA would be relegated and with less decision-making capacity in the projects.
Arbitration outside Venezuela violates the Constitution
At the constitutional level, Villa Macías insists that alternative mechanisms to resolve disputes—including mediation and arbitration—can clash with what is established in the Constitution. In the interview he states that controversies “must be resolved in national, not international, instances”and describes as an especially delicate point that the reform opens the possibility of resolving disputes outside of Venezuelan courts.
For the engineer, this component means that the reform may be “challengeable” and that, in an eventual change of political correlation, agreements and contracts signed under that framework will also remain under dispute.
Less income for the State
The engineer assures that the project reduces the fiscal participation of the State and, therefore, the resources available to support the public administration and reinvest in the industry. In its approach, the reform could take the total fiscal participation from levels that it placed at 65% under the current framework to a much lower range, with royalties that could drop “up to 10%” in certain cases.
“If they couldn’t with 65% of total state participation, they won’t be able to with 15,” he says, questioning the official narrative about improvements in services and stability. In his reading, the reform not only limits the margin of public income, but can leave PDVSA without sufficient capital to sustain operations and investment.
Villa Macías also rejects the idea that the rebound in financial indicators is proof of a structural change. In the program, he maintained that part of the resources reported by recent agreements “came in the form of goods and services” and that they did not enter as reinvestment capital for PDVSA. From their perspective, this feeds a “virtual reality” that does not solve the underlying problem: maintaining operational capacity and reinvestment over time.
“It is not necessary to modify the law, but rather eliminate the sanctions”
Arguing that the reform would be necessary to attract investment and recover production, the engineer maintains that the industry had been showing signs of recovery through the reactivation of wells, although he insists that the central factor continues to be the sanctions environment. For this reason, he summarizes his position in one sentence: “It is not necessary to modify the law, but rather eliminate the sanctions and negotiate.”
In this framework, he says he is in favor of negotiating with different actors, but “watching the sole and primary national interest with respect to sovereignty, our institutions and territorial integrity.”
Villa Macías points out that the project does not incorporate issues that he considers key to the energy future: the decarbonization of the industry, the costs of abandonment and remediation, and confidentiality mechanisms on strategic information. In his opinion, omitting these elements complicates competitiveness in markets that require environmental reports and standards.
The complete interview with Einstein Villa Macías is available on the platforms of SuchWhich.
*Journalism in Venezuela is carried out in a hostile environment for the press with dozens of legal instruments in place to punish the word, especially the laws “against hate”, “against fascism” and “against the blockade.” This content was written taking into consideration the threats and limits that, consequently, have been imposed on the dissemination of information from within the country.
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