October 9, 2019 / 7:00 PM / 5 days ago

Venezuela opposition lawmaker introduces modest reform to oil law

CARACAS, Oct 9 (Reuters) - The chief of the energy committee of Venezuela’s opposition-held National Assembly introduced a law to boost private investment in the oil sector on Wednesday, though its chances of entering into force were slim with President Nicolas Maduro in power.

The legislation by Elias Matta, a lawmaker from oil-rich Zulia state in western Venezuela, is less far-reaching than other opposition proposals, but would still allow private companies to hold majority stakes in upstream joint ventures with state oil company PDVSA and export crude directly.

Matta said that would help boost production, which has collapsed in recent years due to underinvestment and mismanagement, as well as U.S. sanctions aimed at ousting Maduro. That has contributed to a hyperinflationary economic collapse in the OPEC nation

“One of the main aspects of this reform is to open the possibility to have more participation by the private sector,” Matta told reporters. “The state cannot do it on its own.”

He added that he wanted to achieve consensus on the proposal within the energy commission before presenting it to the full legislature.

Reuters reported in August that the proposal would soon be introduced to Congress. It also contains a minimum requirement for domestically produced content in upstream projects, allows private companies to own refineries, and contains incentives to boost natural gas production.

Maduro has not recognized laws passed by the assembly since the opposition won control of the body in 2016. The opposition does not recognize Maduro as the rightful president, arguing his 2018 re-election was fraudulent. National Assembly President Juan Guaido in January invoked the constitution to assume an interim presidency.

Maduro calls Guaido a U.S. puppet seeking to oust him in a coup.

The proposal received pushback from other opposition lawmakers on the commission, who argued that if implemented while Maduro was still in power it would open up opportunities for corruption, or even help Maduro maintain his hold on power.

“Approving it now ... would be giving the government tools to try to, in its crazy desperation, catch a breath of fresh air from the economic point of view,” Tobias Bolivar, a lawmaker from the Democratic Action party, said at the committee’s meeting.

Matta responded by saying even with the new law, the recovery of the oil industry would not be possible without “political change.”

Guaido’s Popular Will party is developing a separate project that would make larger-scale reforms to the law, such as creating an independent agency to oversee the granting of oilfield concessions. (Reporting by Luc Cohen in Caracas Editing by Matthew Lewis)

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