Energy policy of Venezuela

Venezuela has the largest conventional oil reserves and the second-largest natural gas reserves in the Western Hemisphere. In addition Venezuela has non-conventional oil deposits (extra-heavy crude oil, bitumen and tar sands) approximately equal to the world's reserves of conventional oil. Venezuela is also amongst world leaders in hydroelectric production, supplying a majority of the nation's electrical power through the process.

Venezuela nationalized its oil industry in 1975-1976, creating Petróleos de Venezuela S.A. (PdVSA), the country's state-run oil and natural gas company. Along with being Venezuela's largest employer, PdVSA accounts for about one-third of the country's GDP, 50% of the government's revenue and 80% of Venezuela’s exports earnings.

The policy changed in the 1990s, when Venezuela introduced a new oil policy known as Apertura Petrolera, which opened its upstream oil sector to private investments. This facilitated the creation of 32 operating service agreements with 22 separate foreign oil companies, including international oil majors like Chevron, BP, Total, and Repsol-YPF. The role of PdVSA in making national oil policy increased significantly. In 1999, Venezuela adopted the Gas Hydrocarbons Law, which opened all aspects of the sector to private investment.

This policy changed after Hugo Chávez took the presidential post in 1999. In recent years the Venezuelan government has reduced PdVSA’s previous autonomy and amended the rules regulating the country’s hydrocarbons sector. In 2001, Venezuela passed a new Hydrocarbons Law that superseded the previous 1943 Hydrocarbons Law and 1975 Nationalization Law. Under the 2001 law, royalties paid by private companies increased from 1-17% to 20-30%. Venezuela started to strictly adhere to OPEC production quotas. The ownership separation of power generation, transmission, distribution and supply functions was required by 2003 but still not enforced.

Venezuela's new energy policy implemented by President Chávez in 2005 includes six major projects:

In 2007, Chávez announced the nationalization of the oil industry. The foreign oil companies were forced to sign agreements giving majority control of hydrocarbons projects to PdVSA. Projects owned by companies like ConocoPhillips and ExxonMobil, who failed to sign these agreements, were taken over by PdVSA.

...
Wikipedia