During the ordinary session this Thursday, the Venezuelan parliament unanimously approved the Partial Reform of the Organic Hydrocarbons Law.
The debate was chaired by the president of the National Assembly (AN), deputy Jorge Rodríguez, who welcomed the workers of the oil industry, as well as the president of PDVSA, Héctor Obregón; the Minister of Economy and Finance, Anabel Pereira; the sectoral vice president of Economy, Calixto Ortega; the vice president of Exploration and Production of PDVSA, Eduardo Pinto; Yaniel Viloria, Vice President of Gas of PDVSA; Román Maniglia, president of the Bank of Venezuela and president in charge of Pequiven, as well as other officials linked to the hydrocarbon industry and the economic area.
Representative Orlando Camacho, president of the Energy and Petroleum Commission, highlighted that the standard was previously submitted to public consultation with the participation of industry workers in different entities of the country, in order to learn about the experiences, and that more than 120 written proposals were received from various places. He assured that this rule “will change the country’s economy and achieve great transformations in the country.”
The proposals were systematized, said Camacho, who said that the 35 articles of the law were submitted for consideration and approved by the deputies that make up the Energy and Petroleum Commission. “Today, a reform is brought up for second discussion that will change the economy and will make great transformations for us, for our children, for our grandchildren and for the future of Venezuela.”
On the other hand, several articles were modified taking into account the proposals of some parliamentarians regarding the incorporation of terms; among them that of deputy Antonio Ecarri, from the Alianza Lápiz party, who highlighted that the “most important fact for Venezuelans is the fact of oil.” He described the session as historic, for which he said that “the fair content of this law will change for better or worse over the next 50 years.”
to which the president of the National Assembly, Jorge Rodríguez, responded that a good transitional provision would be one “that establishes that the Venezuelan opposition will never again ask for, nor will it paralyze, the oil industry, it will never again request blockades, sanctions, or robberies like that of the Citgo company”, a statement that provoked applause from the members of the parliamentary chamber. As a metaphor, he pointed out that “only one sector has turned off the light of the oil industry,” referring to radical opposition sectors.
Some articles that regulate the activity of operators
Article 1 of the law was approved by consensus as follows: «The purpose of this Law is to regulate everything related to the exploration, extraction, collection, transportation, storage, processing, improvement, refining, industrialization, commercialization, conservation and comprehensive use of hydrocarbons, under the principles of energy sovereignty, public domain of the deposits, progressive maximization of income, legal certainty, contractual transparency, accountability, environmental protection and adaptation to the energy transition; in accordance with the provisions of article 141 of the Constitution of the Bolivarian Republic of Venezuela.
Article 8, which was incorporated, establishes that: «In the contracts for the performance of the activities regulated in this law, the parties may agree that doubts and controversies of any nature arising from the performance of said activities, and which cannot be resolved amicably by the parties, may be decided by the competent courts of the Republic or through alternative dispute resolution mechanisms, including mediation and arbitration. The Ministry with Competence in Hydrocarbons, in consultation with the Attorney General’s Office of the Republic, will establish the general guidelines to establish the dispute resolution clauses referred to in this article. The clauses agreed upon in accordance with said guidelines will not require the opinion or authorization provided for in the decree with the rank, value and force of the Organic Law of the Attorney General’s Office of the Republic and the Commercial Arbitration Law.
Article 25 is worded as follows: «The Ministry with Competence in Hydrocarbon Matters may grant the operating companies, to which the first and second numerals of article 23 refer, the right to exercise primary activities. Likewise, it may transfer ownership or other rights over movable or immovable property in the private domain of the Republic, required for the efficient exercise of such activities. He The Ministry with Competence in Hydrocarbon Matters may revoke these rights when the operators do not comply with their substantial obligations, in such a way that they prevent the achievement of the object for which said rights were transferred. The operating companies exclusively owned by the Republic or their subsidiary companies may transfer, totally or partially by contract to the companies indicated in the third paragraph of article 23 of this law, the rights that have been granted in accordance with the provisions of this article, prior authorization from the Ministry with Competence in Hydrocarbon Matters.
Article 34 states the following: «The constitution of mixed companies and the conditions that will govern the performance of primary activities will be authorized by the President of the Republic and notified to the National Assembly for the purposes of exercising the function of parliamentary control. The National Executive, through the body of the Ministry with Competence in Hydrocarbon Matters, will send a report containing the circumstances pertinent to said constitution and the agreed conditions, including the special advantages provided for in favor of the Bolivarian Republic of Venezuela. Mixed companies will be governed by this law and in each particular case by the decree that authorizes their creation, their statutory constitutive document and, additionally, by the Commercial Code and other laws that may be applicable to them. Joint companies will be excluded from the scope of application of the decree with the rank, value and force of law on public procurement and its regulations, and must implement transparent contracting mechanisms in accordance with the principles of honesty, efficiency, equality, planning, publicity and simplification.
Article 35: «The constitution of mixed companies will be subject to the following conditions:
- Maximum duration of 25 years, extendable for a period to be agreed upon by the parties not exceeding 15 years. This extension must be requested by the operating company from the Ministry with Competence in Hydrocarbon Matters after half of the period for which the right to carry out the activities was granted and before 5 years after its expiration.
- Determination of the location, orientation, extension and shape of the area where the activities are to be carried out and the other specifications established by the regulations.
- Preferential right of the majority shareholder for the acquisition of shares in the event of assignment, sale or transfer by the private shareholder of the mixed company.
- The reversion or transfer to the Republic of lands and permanent works, including the facilities, accessories and equipment that form an integral part thereof, as well as those acquired, generated, processed and interpreted and any other assets obtained for the performance of said activities, regardless of their nature or title of acquisition. When the rights granted are extinguished for any reason, the operating companies are obliged to keep the assets mentioned in this section in good condition to be delivered as property to the Republic, free of encumbrances and without any compensation, so as to guarantee the possibility of continuing the activities, if applicable, or their cessation with the least economic and environmental damage.
Only good things will come after suffering
After the Partial Reform of the Hydrocarbons Law was unanimously approved, the president of the National Assembly, deputy Jorge Rodríguez, stressed that said legal instrument is sanctioned “for history, for the future, for our daughters and our sons” and stressed that “only good things will come after suffering.”
Rodríguez stressed that it was “an arduous process of consultations throughout the country, with more than 120 proposals received throughout the national territory, with an in-depth debate” that took place in the Energy and Petroleum Commission. The president of the AN congratulated the commission “for the strength and tenacity, patience and depth with which they dealt with such complex issues.”
Likewise, he congratulated “the bench of the homeland of Venezuela for the strength with which it carries out these transformations; I congratulate the opposition bench for the constructive nature of its proposals; I congratulate the oil workers who are going to carry out the most important elements of this law reform and I congratulate the people of Venezuela. Only good things will come after suffering. “Only good things for everyone, that we must build together, regardless of how we think, for the prosperity of our Republic.”
Immediately afterwards, he invited the president of PDVSA, Héctor Obregón, and the board of directors of the parent company to come to the prison, in order to present him with the approved bill.
Communication to the president (e) Delcy Rodríguez
The president of the parliament also read in the Chamber the communication that would be sent to the president (e) of the Republic, Delcy Rodríguez:
«Dear President, receive a cordial greeting. I wish to address you on the opportunity to send you the Partial Reform Law of the Organic Law of Hydrocarbons, approved in an ordinary session on Thursday, January 29 of this year, in accordance with the provisions of Article 213 of the Constitution of the Bolivarian Republic of Venezuela, reiterating my feeling of high esteem and consideration. Sincerely, Deputy Jorge Rodríguez Gómez, President of the National Assembly.
