Venezuela's National Assembly has backed a fundamental restructuring of the country's oil sector, driving the final nail into more than two decades of socialist policies that prioritised state control over the industry.

Legislators unanimously approved the hydrocarbon law reform nearly four weeks after US special forces captured Nicolás Maduro during a military operation in Caracas. Acting president Delcy Rodríguez must now sign the bill into law after she introduced proposals to meet US President Donald Trump's demands for changes to attract foreign investment to rebuild the country's flagging oil infrastructure.

Under the new framework, private operators will gain authority over production and commercialisation whilst disputes can be resolved through international arbitration rather than Venezuela's court system. Royalty rates will be capped at 30% but can be lowered at the executive branch's discretion based on project economics and competitiveness requirements.

"The Organic Law reforming the Organic Hydrocarbons Law is now sanctioned for history, for the future, for our daughters and sons," Jorge Rodríguez, head of the National Assembly and the president’s brother, declared after the vote. "Only good things will come after the suffering."

The changes tear down the framework established by the late Hugo Chávez, whose government placed centralised control of petroleum operations at the heart of his oil-funded socialist transformation. A 2006 overhaul mandated that state-owned Petróleos de Venezuela (PDVSA) maintain controlling interests in all significant ventures, prompting the departure of Western multinationals including ExxonMobil and ConocoPhillips after they rejected revised contractual terms.

The new law removes provisions that limited dispute resolution to regime-aligned Venezuelan courts, a change foreign investors deem as crucial protection against potential asset seizures. It also eliminates several taxes and contributions, including wealth taxes and various social levies, consolidating them into a single integrated hydrocarbons tax capped at 15%.

The National Assembly received more than 120 proposals during a consultation process that included meetings with national and international oil executives. Rodríguez led a session with company representatives and lawmakers on Monday before the final parliamentary debate.

US Secretary of State Marco Rubio praised the reform's scope during congressional testimony but cautioned it may prove insufficient. "They have passed a new hydrocarbons law that essentially eliminates many of the restrictions imposed during the Chávez era on private investment in the oil industry," he said. "However, it probably won't be enough to attract the necessary investment, but it represents a significant step forward."

The legislation formalises production-sharing contracts that the Maduro government introduced with limited success under a 2020 anti-blockade law aimed at circumventing US sanctions. According to Rodríguez's administration, the new framework will allow investors to assume operating costs and financing risks whilst providing greater operational autonomy.

Venezuela holds the world's largest proven oil reserves, estimated at roughly 303bn barrels, but production has collapsed from 3.4mn barrels per day when Chávez took power in 1999 to approximately 1mn b/d today. The decline stems from chronic underinvestment, mismanagement and corruption, compounded by US sanctions imposed during successive administrations.

The White House has expressed its intention to promote recovery of Venezuela's oil industry and ensure export revenues benefit the population. The president recently signed an executive order protecting Venezuelan oil assets held in US Treasury accounts from legal claims by international creditors.

Trump has made clear his administration intends to exert direct control over Venezuela's oil sector following Maduro's toppling. "You're dealing with us directly. You're not dealing with Venezuela at all. We don't want you to deal with Venezuela," the president told oil executives at a White House meeting earlier this month, declaring that his government would decide which firms would be allowed to operate in the country.

Employees of the state oil company attended the January 29 legislative session, celebrating as lawmakers completed their vote.

The law will take effect once Rodríguez signs it and it is published in the Official Gazette, completing a legislative process that began shortly after Maduro's ouster. The reform redefines the legal framework of Venezuela's most important industry, whose performance will prove decisive for the country's economic reconstruction.

Whether the changes prove sufficient to lure back major international oil companies remains uncertain. ExxonMobil and ConocoPhillips are still awaiting billions of dollars in arbitration awards stemming from Chávez's 2006 nationalisations, whilst other firms that remained in Venezuela, including Chevron, operated under increasingly unfavourable conditions as successive governments appropriated profits.