Reuters — Venezuela’s Ministry of Hydrocarbons has informed PDVSA’s partners that it intends to keep the July 28 deadline for migrating oil and gas contracts to the country’s new legal framework. The ministry has urged company executives to complete negotiations before that date, according to four sources.
At the end of January, Venezuela’s National Assembly approved a sweeping reform of the Hydrocarbons Law, the foundation of the country’s energy industry. The legislation grants companies greater autonomy to operate oil and gas projects and introduces a new fiscal framework.
The Ministry of Hydrocarbons established a six-month deadline for companies to align existing contracts with the new regulations.
The migration process involves nearly two dozen foreign and domestic companies, including U.S.-based Chevron, Spain’s Repsol, and Italy’s ENI. Most of those companies operate more than one joint venture or contractual project with PDVSA.
According to the sources, negotiations have accelerated in recent days as foreign executives arrived in Caracas to review the extensive documentation required for contract signing. The twin earthquakes that struck Venezuela last month caused delays and temporarily shut down the country’s main airport.
The Ministry of Hydrocarbons did not immediately respond to Reuters’ request for comment.
A weighted royalty rate derived from the newly introduced hydrocarbons tax has become the central issue in the negotiations over the core contracts.
Two of the sources said the ministry may allow companies to submit certain annexes after signing the main agreement, including plans for each energy project to generate its own electricity.
Some of PDVSA’s largest partners negotiating project expansions, including Chevron, have made significant progress in recent months by securing approval for key permits from the ministry, according to documents published in Venezuela’s Official Gazette.
The sources also said companies seeking to enter Venezuela for the first time—primarily high-risk exploration firms and lesser-known energy companies—do not face a specific deadline to negotiate and finalize contract terms following the preliminary agreements they have signed since the beginning of the year.
