Both the oil and gas sectors are governed by the Venezuelan constitution. According to the constitution, all hydrocarbon reservoirs within Venezuelan territory belong to the republic. 

Hydrocarbons belong to the operator-producer at the wellhead.

In addition, the sale of hydrocarbons is subject to certain restrictions, as outlined in 3.1 Forms of Private Investment: Midstream/Downstream.

The Ministry of People’s Power for Hydrocarbons (Ministerio del Poder Popular de Hidrocarburos, or MINHIDROCARBUROS) is the government body in charge of overseeing the oil and gas industry. MINHIDROCARBUROS also possesses the authority to inspect operational works and audit tax and royalty calculations.

Lower-ranking authorities have been created in the past, but with a limited and circumstantial purpose, always under the control of MINHIDROCARBUROS.

Petróleos de Venezuela, S.A. (PDVSA) and its subsidiaries form the national oil and gas company. PDVSA is a corporation wholly owned by the state, and its operation is controlled and supervised by MINHIDROCARBUROS.

The principal hydrocarbon laws and regulations are as follows:

• oil legal framework – the constitution; the Organic Hydrocarbons Law (Ley Orgánica de Hidrocarburos), which underwent a substantial structural reform on 29 January 2026 (Official Gazette No 6.978) (OHL) governing oil and associated gas, as well as other laws and regulations issued for specific matters; and 
• gas legal framework – the constitution; the Gas Law and its Regulations (governing non-associated gas), and the OHL for upstream activities of associated gas up to the wellhead.

For Oil Projects

The 2026 OHL reform introduced a major liberalisation of upstream participation. Primary activities (exploration, extraction, gathering, and initial transportation) can now be conducted through three mechanisms:

• directly by the State or its wholly-owned companies;
• through joint ventures (empresas mixtas), where the State holds a controlling interest of more than 50%; the 2026 law introduces the ability for minority private shareholders to be authorised to directly manage the venture’s technical operations, open and manage domestic and offshore bank accounts, and directly commercialise production quotas; and
• through Contracts for the Development of Primary Activities, a newly established mechanism allowing private companies domiciled in Venezuela to contract directly with state-owned companies; under these contracts, the private operator assumes the integral management, cost, and risk of the primary activities.

For Gas Projects

The Gas Law permits 100% private operators to engage in such activities for non-associated gas, with a prior licence issued by MINHIDROCARBUROS (ie, Ypgeras and Cardon IV, among others).

Oil Developments

The selection of operating companies is primarily driven by a competitive process aimed at encouraging concurrent offers. The National Executive, acting through the MINHIDROCARBUROS, which has competence in hydrocarbons, establishes specific committees tasked with setting the necessary conditions and selecting the participating companies. During a competitive bid, the MINHIDROCARBUROS explicitly reserves the right to suspend the selection process or declare it void at any time, without incurring any obligation to compensate the participating bidders.

However, the law establishes a critical alternative pathway: for reasons of public interest or due to special circumstances surrounding the activities, the National Executive may bypass the public bidding process and directly select an operator. This direct selection mechanism requires prior approval from the Council of Ministers.

The regulatory prerequisites differ depending on whether the investor is forming an empresa mixta or operating as a 100% private contractor:

• Contracts for the Development of Primary Activities (Private Operators): To enter into direct operational contracts with state-owned entities, the private company must be legally domiciled in Venezuela. The government must conduct a prior evaluation of the private company's suitability and operational capacity. Crucially, the private investor is required to demonstrate its financial and technical capability by submitting a comprehensive business plan, which must be formally approved by the MINHIDROCARBUROS before the execution of the primary activities. Under these contracts, the private operator assumes the integral management of the activities entirely at its own cost and risk.
• Joint Ventures (Empresas Mixtas): The constitution of a joint venture is subject to a more rigorous, high-level political process. It must be expressly authorised by the President of the Republic and subsequently notified to the National Assembly for parliamentary control. The MINHIDROCARBUROS must submit a detailed report outlining the circumstances of the venture's formation, the agreed-upon conditions, and any special advantages (such as technology transfers or educational contributions) granted to the Republic.

A major shift in the 2026 regulatory approach is the deregulation of procurement and contracting for upstream operators. Historically, operators faced operational bottlenecks due to state procurement rules. The 2026 reform explicitly exempts both empresas mixtas and direct Primary Activity Contracts from the scope of the Public Procurement Act (Ley de Contrataciones Públicas) and its regulations. Instead of being bound by rigid state procurement policies, these entities are only required to implement their own internal, transparent contracting mechanisms based on general principles of honesty, efficiency, equality, and simplification.

Furthermore, while the MINHIDROCARBUROS grants the overarching right to exercise primary activities, state-owned companies are now legally permitted to assign their granted rights (partially or totally) to private domiciled companies via contract, subject to prior MINHIDROCARBUROS authorisation.

Gas Developments

Under a licence issued by MINHIDROCARBUROS, private entities may develop non-associated natural gas reservoirs. There is a maximum 35-year licence period, which can be extended for an additional 30 years.

According to the Gas Law, licences must be awarded through a public bidding process; however, MINHIDROCARBUROS may grant licences directly if authorised by the Council of Ministers for reasons of national interest.

The MINHIDROCARBUROS must approve the appointment of an operator if the licence is granted to more than one participant.

It is not mandatory for the State to participate in gas projects; a number of licences, however, grant certain rights to the State. These licences require the negotiation and execution of a joint venture agreement to regulate the relationship between private investors and the State.

The State is entitled to a royalty of up to 30% of the volume of extracted and non-reinjected hydrocarbons. However, breaking from historical rigidity, the MINHIDROCARBUROS is now empowered to dynamically determine and adjust this percentage based on project economics, capital requirements, and international competitiveness to guarantee the project's economic equilibrium throughout its phases.

For private operators executing primary activity contracts, remuneration consists of a percentage share of the audited hydrocarbon volumes (which they can commercialise directly after meeting government obligations), via profit-sharing mechanisms or both. Companies exclusively owned by the Republic or its affiliates may grant private companies the use of assets or materials they own, as well as the operational area, in exchange for a percentage of consideration in kind (hydrocarbons), with all rights reverting upon contract termination.

Fiscal and Tax Regime

Royalty

The State is entitled to a share of up to 30% of the hydrocarbons extracted and not reinjected from any field. The percentage may be modified to ensure the economic equilibrium of the project.

Companies exclusively owned by the Republic or its affiliates act as withholding or collection agents for royalties.

Integrated hydrocarbon tax

An aliquot of up to 15% is established on the taxable base, which corresponds to the total gross income earned by taxpayers. The MINHIDROCARBUROS, following an opinion from the Ministry of Finance, will determine the applicable integrated hydrocarbon tax rate for each project within the aforementioned limits. It will be determined and advanced monthly and liquidated in full annually. Consumption, surface, extraction, and export registration taxes are eliminated.

Companies exclusively owned by the Republic or its affiliates act as withholding or collection agents for the integrated hydrocarbon tax.

Income tax

Empresas mixtas are subject to a tax rate of 50% of their net income. The National Executive may reduce the income tax (Impuesto Sobre la Renta) rate applicable to each project, taking into account the nature of the project and its economic viability, among other aspects.

Exemptions

Operators are exempt from paying the large fortune tax (Impuesto a los Grandes Patrimonios) and various special contributions, such as:

• special contribution provided for in the Organic Law of Science, Technology, and Innovation (Ley Orgánica de Ciencia, Tecnología e Innovación);
• special contribution provided for in the Organic Law of Sports, Physical Activity, and Physical Education (Ley Orgánica de Deporte, Actividad Física y Educación Física);
• special contribution provided for in the Organic Law of Drugs (Ley Orgánica de Drogas); and
• contribution provided for in the Law for the Protection of Social Security Pensions against the Imperialist Blockade (Ley de Protección de Pensiones de Seguridad Social frente al Bloqueo Imperialista).

The activities referred to in this Law are not subject to the social responsibility commitment established in the Law of Public Contracting (Ley de Contrataciones Públicas), nor to state or municipal taxes.

See 2.3 Typical Fiscal Terms: Upstream.

Oil Sector

According to the Income Tax Law, empresas mixtas are subject to a special proportional tax rate of 50% of their net income. However, according to the reformed OHL, the National Executive may reduce the income tax rate applicable to each project, taking into account the nature of the project and its economic viability, among other aspects.

Gas Sector

The income tax rate for non-associated gas is 34%, and 50% in the case of associated gas. 

When structuring foreign investment for oil and gas activities in Venezuela, it is advisable to take into consideration the investment treaties in force, as well as treaties to avoid double taxation that Venezuela has entered into with several countries.

PDVSA by itself can carry out primary activities. PDVSA or any subsidiary (eg, Corporación Venezolana del Petróleo, SA, or CVP) must hold, as provided by OHL, an equity greater than 50% in the empresa mixta. In addition, the corresponding empresa mixta agreement and its conditions will be approved by PDVSA (or its affiliate), authorised by the President of the Republic and notified to the National Assembly for the purposes of parliamentary oversight. Under the previous OHL, mixed companies had to be approved by the National Assembly.

In principle, the Venezuelan government, through PDVSA and its affiliates, controls all the country’s oil activities. However, in the new OHL Reform, empresas mixtas and private companies with a contract may now be authorised by the MINHIDROCARBUROS to directly commercialise all or a quota of production, always under commercialisation plans approved by the Ministry and ensuring that sale prices are equal to or higher than the market prices achieved in the market by the operating company exclusively owned by the Republic or its affiliates.

See 1.3 National Companies, 2.1 Forms of Private Investment: Upstream and 2.2 Issuing Upstream Licences/Obtaining Hydrocarbon Rights.

According to Article 19 of the OHL, empresas mixtas are required to include national companies in their contracting processes in order to ensure the optimal and effective use of goods, services, human resources and capital. Likewise, entities subject to the Gas Law must include national companies, personnel, goods and services in their contracting processes.

For companies to obtain the relevant licences, they must comply with the Guidelines for the Participation of National Capital in Gas Projects (issued by MINHIDROCARBUROS in 2002). The guidelines are aimed at encouraging the formation of local companies and the participation of locals in gas projects through the incorporation of Venezuelan goods, services and private entities. According to the guidelines, licencees must adhere to the percentages of national participation and/or content.

The Public Procurement Act, the primary law governing state procurement, no longer applies to empresas mixtas, as stated in Article 34 of the reformed OHL. Nonetheless, the Act contains provisions designed to stimulate the domestic production of goods, services, and works. Consequently, it favours bids with higher “national content” and “national added value”. The labour legislation and regulations of 2012 contain additional provisions for hiring foreign workers. A minimum of 90% of the employees must be Venezuelans, and the total remuneration paid to foreign employees cannot exceed 20% of the company’s total payroll. If there are no technical skills or professionals available in the country, the Ministry of Labour may authorise temporary exceptions to this limitation.

Oil Developments

See 1.3 National Companies, 2.1 Forms of Private Investment: Upstream, 2.2 Issuing Upstream Licences/Obtaining Hydrocarbon Rights and 2.5 Federal or State Companies.

Upstream Development Plans

• Business Plan Approval: Private companies executing primary activities must demonstrate their financial and technical capacity via a business plan (plan de negocio) approved by the MINHIDROCARBUROS.
• Technical and Operational Management: The National Executive, through the MINHIDROCARBUROS, may authorise the minority shareholder of an empresa mixta to directly exercise the technical and operational management of the company.

Refining Licences

• Mandatory Licence: Companies must obtain a specific licence from the Ministry to engage in refining activities, and any assignment or transfer requires prior approval.
• Minimum Requirements: Article 14 of the OHL sets out the minimum criteria for obtaining a refining licence, specifically Paragraph 2 (project description, technology, and destination of products).

Industrialisation Permitting

• Mandatory Permit: Private companies dedicated to the industrialisation of refined hydrocarbons must obtain a permit from the Ministry.
• Requirements: The indication of the raw material supply source and the definition of the project alongside its product destinations is required by law.

Commercialisation and Domestic Supply

• Commercialisation Plan: The OHL obliges authorised companies to comply with the commercialisation plan approved by the Ministry.
• Domestic Supply Quotas: The OHL requires companies to satisfy the domestic supply requirements (suministro interno) fixed by the MINHIDROCARBUROS.

Gas Developments

The maximum period for exploration activities under gas licences is five years. Upon discovering non-associated natural gas, the participant must submit an evaluation plan to MINHIDROCARBUROS within 90 days of the discovery; where well testing is carried out, the deadline is instead 30 days after the well test’s completion. The evaluation period should not exceed two years. Upon a declaration of commerciality, the participant must submit a development plan for MINHIDROCARBUROS’s approval.

The maximum initial term of the licence is 35 years, with a possible extension of no more than 30 years.

• Economic Stabilisation: The 2026 OHL guarantees the economic and financial equilibrium of the contracts. If subsequent changes to the legal, fiscal, regulatory, or contractual framework negatively and substantially affect project economics, the MINHIDROCARBUROS is legally mandated to adjust royalties, taxes, tariffs, or contract terms to restore the operator’s original economic position.
• Dispute Resolution: A landmark shift permits all hydrocarbon contracts to include alternative dispute resolution clauses, including international arbitration and mediation. These clauses no longer require the prior binding authorisation of the Attorney General’s Office (Procuraduría General de la República), removing a major historical bottleneck for international financing.
• Duration and Reversion: Empresas mixtas are established for a maximum of 25 years, with the possibility of a single 15-year extension. Upon the expiration of the rights, all lands, permanent works, installations, equipment, and generated data revert to the Republic free of liens and without compensation.

The reformed OHL incorporated a right of first refusal for the majority shareholder in the event of a transfer of shares in empresas mixtas by the minority shareholder. This right of first refusal has been included in almost all articles of incorporation of previously constituted mixed companies.

MINHIDROCARBUROS is expressly empowered to transfer the right to carry out primary activities, as well as ownership or other rights over movable and real property within the private domain of the Republic, directly to companies exclusively owned by the Republic and to empresas mixtas. The OHL clarifies that it may revoke these rights if the operators breach their substantial obligations in a manner that prevents the fulfilment of the purpose for which said rights were transferred. Likewise, operator companies exclusively owned by the Republic or affiliates may transfer these rights to private operator companies domiciled in the Republic, subject to prior authorisation from the MINHIDROCARBUROS.

According to the Gas Law, interests in gas developments may only be assigned with the prior approval of MINHIDROCARBUROS. Licence rights cannot be encumbered. A breach of these provisions triggers the revocation of the licence.

There are currently no local limitations on production. However, Venezuela, as a founding member of the Organization of the Petroleum Exporting Countries (OPEC), is subject to agreement on prices and maximum production quotas.

In the gas regime, midstream activities can be performed directly by the State or by 100% private entities (under the Gas Law, a permit is required from MINHIDROCARBUROS). 

In the hydrocarbons regime, the OHL states that activities concerning the distillation, purification and transformation of natural hydrocarbons aimed at adding value, alongside the commercialisation of the resulting products, constitute refining and commercialisation activities that may be carried out by the State and private entities, either jointly or separately. However, it explicitly reserves to the State all existing installations and works (including their expansions and modifications) owned by the State or its wholly-owned companies that are dedicated to the domestic refining of natural hydrocarbons and the primary transport of products and gas.

Although the January 2026 reform of the OHL amended multiple regulations and introduced unprecedented liberalisation to the sector, certain foundational restrictions remain firmly in force. According to the Organic Law of Reorganisation of the Internal Market, the domestic distribution of derivatives and oil by-products must be directly performed by the State. Hence, the State has total control over distribution and, in practice, a monopoly on the retail sale of fuel.

See 2.7 Development and Production Requirements.

According to the OHL, there is a difference between refining and industrialisation of oil since they have different entitlement procedures. The right to perform refining activities is granted through a licence, while the right to perform industrialisation activities is granted through a permit, both to be issued by MINHIDROCARBUROS.

Pursuant to the Gas Law, in order to conduct activities other than exploration and production of gaseous hydrocarbons, MINHIDROCARBUROS permits are required.

See 2.1 Forms of Private Investment: Upstream and 2.3 Typical Fiscal Terms: Upstream.

The OHL provides that “initial” transportation and storage of oil be reserved for the State as a primary activity. The OHL does not define “initial” transportation or storage.

The Gas Law, its Regulations, and the Storage and Distribution Rules relating to Liquefied Petroleum Gas Management (2010) mostly govern gas storage. It is possible for a private company, with or without government participation, to perform the storage activity (including for liquefied natural gas or LNG); however, MINHIDROCARBUROS must issue a licence or permit for the activity. The applicable tariff is based on the principles of reasonable profitability and the characteristics of the service.

See 2.4 Income or Profits Tax Regime: Upstream.

See 2.5 Federal or State Companies.

The Law on Rearrangement of the Internal Market gives the State total control over distribution and a virtual monopoly over retail.

This law reserves to the State the role of intermediating the supply of liquid fuels for reasons of national interest. Additionally, land, water and coasting transport activities for liquid fuels are reserved.

The national executive is responsible for carrying out reserved activities through MINHIDROCARBUROS, PDVSA or its subsidiaries. As a result, PDVSA and its subsidiaries supply liquid fuels to the domestic market.

See 2.6 Local Content Requirements: Upstream.

To construct and operate gas transportation pipelines, participants must obtain permits from MINHIDROCARBUROS. The terms and conditions for these types of permits are very similar to those for exploration, development and production licences. MINHIDROCARBUROS requires any operator of transportation systems to have technical qualifications. MINHIDROCARBUROS must approve transportation tariffs. 

Each permit will specify the terms, which must be in accordance with the law. A description of the project and any special considerations for the republic should also be included.

Gas processing and industrialisation activities, as well as the marketing of liquefied petroleum gas, are not covered by the provisions related to the reversal of assets (see 2.9 Transfers of Interest: Upstream Licences and Assets).

Venezuelan legislation makes a distinction between surface rights and the ownership of hydrocarbon reservoirs (all hydrocarbon reservoirs within Venezuelan territory belong to the republic).

Expropriation and Occupation Rights

Activities governed by the OHL are declared to be of public utility and social interest. Consequently, the National Executive or authorised operators (such as joint ventures – empresas mixtas – or private contractors) may initiate temporary occupation or expropriation proceedings before the competent courts to secure the lands, permanent works, and installations required for exploration, extraction, refining, or transport projects. Under the statutory framework, the Republic retains absolute ownership over all underlying hydrocarbon reservoirs at all times, independent of any surface rights held by private owners.

Indemnification and Court Proceedings

While operators typically seek to negotiate easements or rights of way directly with landowners, a failure to reach an amicable agreement allows the State or the designated operator to pursue judicial expropriation or temporary occupation. In these court proceedings, the primary matter subject to judicial determination is the fair quantum of indemnification due to the property owner. Once the legal requirements are satisfied, the authorised entity is legally permitted to occupy the land and construct the necessary infrastructure to guarantee continuous and efficient operations.

Assets Reversion and Expiry

Upon the expiration, termination, or revocation of an empresa mixta or a private production development contract for any reason, a strict statutory reversion clause applies. All lands, permanent works, installations, accessories, equipment, and technical data generated or processed during the term must be handed over and revert to the Republic. These assets must be transferred in good operational condition, completely free of any liens, encumbrances, or mortgages, and explicitly without any right to indemnification or compensation for the outgoing operator.

The Gas Law establishes that permits issued by MINHIDROCARBUROS required to carry out the corresponding activities of gaseous hydrocarbons must provide that the land, facilities, accessories and equipment used and any other assets acquired for the performance of the activities, must be maintained in good condition, and handed over to the State, free of liens and without indemnification upon expiration of the permit. Processing and industrialisation of gaseous hydrocarbons and activities related to the commercialisation of liquefied petroleum gases are expressly excluded from this obligation.

According to the OHL, initial transportation of hydrocarbons is reserved to the State as a primary activity and can only be carried out directly by the State, by state-owned companies, empresas mixtas or private companies with a contract. Virtually all oil pipelines in Venezuela belong to and are operated by PDVSA, its affiliates and subsidiaries.

The transportation of hydrocarbons, excluding initial transportation, is restricted to the aforementioned. This restriction also applies to the transportation of specific hydrocarbon derivatives.

Private investors desiring to engage in transportation activities of hydrocarbon derivatives must obtain a contract and prior permission from MINHIDROCARBUROS. The assignment or transfer of these permits will also require prior authorisation from MINHIDROCARBUROS.

Gas Sector

The Gas Law allows private investors to carry out transportation activities. In practice, all major transportation systems existing in Venezuela are owned and operated by PDVSA or its subsidiaries.

To construct and operate gas transportation pipelines, private investors must obtain permits from MINHIDROCARBUROS and the environmental authorities.

The specific terms and conditions will be set out in the corresponding permit, which must be in accordance with the Gas Law and its Regulations. A description of the project and any special considerations for the republic should also be included.

Oil and gas companies must grant third parties access to their infrastructure when they have a surplus or extra capacity under the OHL and the Gas Law. It is possible for these companies to charge for that service, and the terms and conditions should be negotiated between the parties, or otherwise set by MINHIDROCARBUROS.

Venezuela’s major transportation systems are owned by a state-owned company that is also a major gas producer. Thus, MINHIDROCARBUROS determines producers’ access to transportation capacity.

PDVSA or its subsidiaries (including empresas mixtas) own and operate most pipeline systems for both gas and oil, so conflicts have not been significant. Nevertheless, this might change given the recent OHL reform.

Production, transport and distribution activities cannot be controlled or developed simultaneously by one individual unless authorised by MINHIDROCARBUROS, unless separate accountability is maintained.

See 2.1 Forms of Private Investment: Upstream, 2.3 Typical Fiscal Terms: Upstream, 2.5 Federal or State Companies, 2.7 Development and Production Requirements and 3.1 Forms of Private Investment: Midstream/Downstream.

Gas can be sold in the local market without restriction. Private entities are allowed to export their gas production under the Gas Law and licences. Nevertheless, there is a general provision to satisfy the local market.

See 2.1 Forms of Private Investment: Upstream, 2.3 Typical Fiscal Terms: Upstream, 2.5 Federal or State Companies, 2.7 Development and Production Requirements and 3.1 Forms of Private Investment: Midstream/Downstream.

Private investors can carry out natural gas exports with the approval of MINHIDROCARBUROS. Up to 90% of the gas produced can be exported under some licences (ie, some of the Plataforma Deltana licences).

Because Venezuela has historically been energy self-sufficient, the current legal framework is not well developed for energy imports (however, see 4.2 Sanctions).

Both oil and gas regimes require prior authorisation from MINHIDROCARBUROS for transfers, encumbrances and execution of rights granted by licences and permits.

The corresponding licence or permit may be revoked if such activities are carried out without the corresponding authorisation.

The Constitutional Law on Productive Foreign Investment establishes the general legal framework for foreign investment. Venezuela has entered into multiple economic co-operation agreements with numerous countries, including OPEC, Petrocaribe and the Gas Exporting Countries Forum, regarding energy developments, in order to facilitate the execution of some projects.

Additionally, Venezuela has entered into a wide range of bilateral investment agreements with countries such as Barbados, China, Colombia, the Netherlands, Canada, Chile, Spain, France, the United Kingdom, Peru, Portugal, Russia, Sweden, Switzerland and Uruguay, among others. 

In a treaty of this nature, investments are protected from unfair and unequal treatment or unlawful expropriation, depending on the mechanism adopted in the treaty (taking into account that Venezuela has not been a member of the ICSID Convention since 2012). 

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards is also part of Venezuela’s legal system.

Venezuela and its governmental entities are subject to a comprehensive sanctions regime administered by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC).

US sanctions generally operate through two principal mechanisms. First, primary sanctions prohibit US persons from engaging in transactions involving blocked persons, entities, or activities. Second, certain sanctions authorities may expose non-US persons to secondary sanctions consequences for engaging in specified categories of conduct involving sanctioned persons or sectors.

A significant expansion of the Venezuela sanctions framework occurred on 28 January 2019, when OFAC designated Petróleos de Venezuela, S.A. (PDVSA) as a Specially Designated National (SDN). As a result, PDVSA and entities owned, directly or indirectly, 50% or more by PDVSA became blocked persons for purposes of US sanctions.

On that same date, the US Department of the Treasury issued a Determination Pursuant to Executive Order 13850 identifying the Venezuelan oil sector as a sector of the Venezuelan economy subject to sanctions measures. Historically, these measures had a significant impact on activities involving Venezuela’s oil industry.

Subsequently, on 5 August 2019, Executive Order 13884 imposed broad blocking measures against the government of Venezuela. As a result, the government of Venezuela became subject to comprehensive restrictions under the US sanctions framework.

At the same time, the existence of sanctions affecting PDVSA, the government of Venezuela, or specific sanctioned sectors does not mean that all transactions involving Venezuelan persons or entities are prohibited. As a general matter, ordinary transactions between private persons and entities that are not blocked persons do not become prohibited solely because they occur in Venezuela or involve Venezuelan counterparties. Rather, the sanctions analysis generally focuses on the identity of the parties involved, the nature of the transaction, the sector concerned, and the existence of any applicable authorisation.

Historically, the gas sector has also occupied a somewhat different position from the oil sector. Unlike the oil industry, the gas sector was not the subject of the 28 January 2019 Oil Sector Determination. In addition, many gas projects have not involved PDVSA or PDVSA-controlled entities as majority owners or controlling participants. As a result, the sanctions considerations applicable to gas projects have often differed from those applicable to traditional PDVSA-controlled oil operations.

However, the current sanctions regime cannot be understood solely by reference to the restrictions imposed in 2019. It must also be analysed through the extensive authorisation framework subsequently established by OFAC, principally through a series of General Licences and related interpretive guidance that have materially expanded the categories of activities authorised in Venezuela’s oil, gas, petrochemical, financial, and mining sectors. These General Licences operate as self-executing authorisations. Accordingly, where a transaction falls within the scope of an applicable General Licence and any applicable conditions are satisfied, parties may generally rely directly upon the authorisation without obtaining a specific licence from OFAC.

The principal General Licences currently applicable to Venezuela’s oil, gas, petrochemical, and related financial sectors include:

• General Licence 46C authorises established US entities to engage in transactions relating to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, transportation, refining, and downstream commercialisation of Venezuelan-origin oil and petroleum products.
• General Licence 47A authorises transactions relating to the exportation, reexportation, sale, supply, storage, delivery, and transportation of US-origin diluents to Venezuela, together with related logistical, shipping, insurance, and operational support activities.
• General Licence 48B authorises the provision of goods, technology, software, equipment, and services for oil, gas, petrochemical, and related energy-sector operations in Venezuela.
• General Licence 49A authorises negotiations, due diligence activities, and contingent contractual arrangements relating to investments and projects in Venezuela’s oil, gas, petrochemical, and electricity sectors.
• General Licence 50B authorises the continued operations in Venezuela of certain multinational energy companies, including BP, Chevron, Eni, Maurel & Prom, Repsol, and Shell.
• General Licence 52A authorises “all transactions” involving Petróleos de Venezuela, S.A. (PDVSA) and entities in which PDVSA owns, directly or indirectly, a 50% or greater interest, by established US entities, subject to applicable conditions, reporting requirements, and other limitations.
• General Licence 56 authorises negotiations and contingent contractual arrangements with the government of Venezuela, including bids, agreements in principle, and other preliminary commercial arrangements.
• General Licence 57 authorises specified banking and financial services involving certain Venezuelan financial institutions and permits a range of financial transactions that would otherwise be restricted.
• General Licence 58 authorises certain services and activities relating to potential sovereign debt restructuring and related financial arrangements involving the government of Venezuela.

OFAC has also established a separate framework applicable to Venezuela’s mining sector:

• General Licence 51B authorises downstream commercialisation and related transactions involving Venezuelan-origin minerals, including gold, such as exportation, sale, resale, transportation, processing, refining, storage, and related commercial activities.
• General Licence 54A authorises the provision of goods, technology, software, equipment, and services for mining operations and related activities.
• General Licence 55 authorises negotiations and contingent contractual arrangements relating to mining and mineral-sector projects.

In addition to the General Licences themselves, OFAC has issued extensive interpretive guidance regarding the Venezuela sanctions framework, including numerous FAQs that clarify the scope, application, and operation of the various authorisations. Particularly relevant examples include FAQ 1245 (18 March 2026), which provides important guidance regarding the scope of General Licence 52A, and FAQ 1247 (31 March 2026), in which OFAC confirmed that non-US persons do not risk exposure to US sanctions for engaging in transactions authorised under the applicable licensing framework, provided the relevant conditions and requirements are satisfied. These FAQs, together with the General Licences themselves, form an important part of the current sanctions framework and are frequently relied upon by market participants, financial institutions, compliance professionals, and legal counsel when evaluating contemplated transactions.

In practice, it is generally advisable for parties contemplating activities involving Venezuela to undertake an appropriate sanctions and compliance review, often with the assistance of legal counsel, in order to assess whether the contemplated activities fall within the scope of an applicable General Licence, whether any conditions or limitations apply, and whether additional guidance or authorisation may be advisable. Such reviews may also assist financial institutions, insurers, counterparties, and other market participants in evaluating sanctions risks and documenting their compliance analysis. Where appropriate, parties may also seek transaction-specific guidance, interpretive advice, or a specific licence from OFAC.

Accordingly, while PDVSA and the government of Venezuela remain subject to US sanctions, the current OFAC framework differs materially from the sanctions architecture that existed in 2019. Through a series of General Licences and related interpretive guidance, OFAC has established significant authorisation pathways for activities involving Venezuela’s oil, gas, petrochemical, financial, and mining sectors. As a result, a substantial range of transactions may be conducted pursuant to the applicable General Licences without obtaining a specific licence from OFAC, provided that the relevant authorisation applies and any applicable conditions are satisfied.

Due to the impact oil and gas activities have on the environment and their relevance to Venezuela, these activities are extensively regulated and several government agencies are involved in the process of issuing the permits, consents and authorisations generally required. 

Environmental protection is governed primarily by the constitution. Among the most relevant regulations in the environmental field are: 

• the Environment Organic Law (2006); 
• the Environmental Criminal Law (2012); 
• the Forest Law (2013);
• the Water Law (2007) and its Regulations (2018);
• the Water and Air Quality Law (2015); and
• the Substances, Materials and Hazardous Waste Law (2001).

The highest authority in this matter is the Ministry of Ecosocialism (MINEC). 

An environmental impact study must be conducted prior to the start of a project. 

In addition, environmental permits (granted by MINEC) are required for:

• occupying land;
• registering activities impacting the environment;
• drilling water wells;
• using water resources;
• affecting natural resources; and
• deforesting and moving soil, among others.

Additionally, persons who operate in sectors that could potentially harm or degrade the environment (such as oil and gas) must register with the Registry of Activities Able to Degrade the Environment.

Regarding offshore developments, there are no special laws or regulations other than those previously mentioned. 

Additionally, there are no special health and safety regulations in this regard besides the general regimen set in the Labour Law and the Occupational Safety and Health Act. To guarantee employee safety, employers in this sector must comply with the laws and regulations, and PDVSA’s Collective Bargaining Agreement.

Under the law, MINHIDROCARBUROS has the authority to inform the participant of which wells must be abandoned and which assets must be removed upon the expiration of the licence. It is the participants’ responsibility to undertake abandonment activities at their own expense and risk.

In the OHL, decommissioning of oil structures is not specifically addressed (except for the requirement that all assets revert to the State upon the termination of the conferred rights). The empresas mixtas should follow the guidelines issued by MINHIDROCARBUROS, and they should develop their own decommissioning programme approved by their board of directors, which requires the State-appointed directors to vote. Decommissioning terms are generally included in the project documents and agreements.

Regarding climate change laws, Venezuela has executed and ratified various agreements (such as the Vienna Convention for the Protection of the Ozone Layer, the Kyoto Protocol, the Montreal Protocol and the Paris Agreement). 

National regulations govern the protection of the ozone layer, air quality and atmospheric pollution.

In 2021, the Presidential Commission of the Green Climate Fund was established as an advisory body to the president for preparing projects for the Green Climate Fund.

Venezuela owns all hydrocarbon reservoirs in its territory. The national government regulates and taxes the oil and gas industry, and local governments do not have the authority to limit or prohibit oil and gas projects.

There are no major laws or government programmes that are focused on energy transition in Venezuela. However, in 2024, the Standing Committee on Energy and Petroleum of the National Assembly (Congress) concluded the public consultation process for the Renewable and Alternative Energy Bill, with its first discussion to be included in the Legislative Agenda of the National Assembly during the 2024 regular session period.

Currently, oil and gas upstream and midstream assets are not being used in projects or activities associated with energy transition projects.

Whilst the Venezuelan government has not undertaken major projects concerning the energy transition, its official Homeland Plan of the Seven Transformations 2025-2031 (Plan de la Patria de las 7 Grandes Transformaciones 2025–2031) establishes a key strategic objective: the diversification of the national energy matrix. This involves aligning fuel production with domestic demand to guarantee availability throughout the national territory, promoting alternative fuels, and expanding the energy supply with new sources. Nevertheless, Venezuela remains significantly behind in implementing concrete measures that would contribute to both its national and the global energy transition.

There are no specific laws or regulations other than the OHL, the Gas Law and its Regulations (see 1.4 Principal Hydrocarbon Law(s) and Regulations). 

There is no special scheme relating to LNG projects, which are regulated by the Gas Law and its Regulations.

Venezuela has been producing oil for over a century and holds the world’s largest oil reserves (more than Saudi Arabia). Venezuela’s oil production capacity has declined in recent years, but the country could still be a major player in South America and globally, especially given the OHL Reform and the General Licenses published by the OFAC that have opened up the capacity for investments in the Venezuelan oil and gas sector. 

As we have seen, the comprehensive reform of the OHL has fundamentally altered the domestic energy framework, replacing restrictive historical rules with unprecedented mechanisms for 100% private operation contracts, direct commercialisation rights, and a comprehensive fiscal restructuring. In alignment with this progressive shift, an unconfirmed draft of the new Regulations for the Hydrocarbons Law has recently begun to circulate in the market. Whilst not yet definitive, this draft proposes establishing strict technical, operational, and fiscal rules across the entire value chain, including the mandatory incorporation of modern fiscalisation tools, strict environmental liability, and a severe sanction framework. Concurrently, the broader regulatory landscape continues to be heavily shaped by a dynamic matrix of US economic sanctions, with OFAC issuing and updating numerous General Licences throughout 2025 and 2026 to authorise specific operations. Ultimately, these progressive regulatory shifts lay a highly practical, business-friendly foundation for foreign investors, paving the way for a sustained recovery and a prosperous new era for the Venezuelan energy sector.

There have been no changes regarding gas operations.