Francisco Bracamonte
Tax Partner at Kreston BSG
Venezuela’s Hydrocarbons reform bill brings new opportunities to energy sector
February 20, 2026
Venezuela’s Hydrocarbons reform bill brings gradual regulatory reforms and renewed openness to foreign participation. Adjustments to the Hydrocarbons Law came as recently as January 2026, expanding joint venture frameworks, and evolving foreign investment rules have created a more flexible environment for international companies seeking entry into oil, gas, and emerging renewable projects. These shifts – combined with efforts to modernise international trade mechanisms – signal a strategic window for investors prepared to navigate a transitioning market.
What is the new Venezuelan Hydrocarbons reform bill?
On January 29, 2026, Venezuela enacted and published the Law Amending the Organic Hydrocarbons Law, introducing significant changes to the regulatory framework governing exploration, production, transportation, refining and commercialization of hydrocarbons. The amendment establishes three permitted structures for conducting primary activities: directly by the State or its wholly owned entities; through Mixed Companies in which the State retains majority ownership; and through contracts between state-owned entities and private companies domiciled in Venezuela. While preserving state ownership of hydrocarbon deposits, the reform expands avenues for private sector participation and formalizes new contractual mechanisms under Ministry oversight. It also expressly permits the use of alternative dispute resolution, including arbitration, in accordance with guidelines to be issued by the Ministry.
The amendment introduces a revised fiscal regime that will enter into force 60 days after publication (April 3, 2026). The State may apply royalties of up to 30% on extracted volumes not used in operations, and a new Integrated Hydrocarbons Tax of up to 15% on gross monthly income, with rates determined on a project basis and adjustable to preserve economic equilibrium. The law includes transitional provisions requiring existing Mixed Companies and certain contracts executed under the Anti-Blockade Law to align with the new framework within 180 days, without worsening previously agreed economic conditions. Several prior statutes governing private participation in primary hydrocarbon activities are repealed, while existing Productive Participation Contracts remain valid subject to conformity adjustments.
Kreston BSG ready for regulatory complexity
Kreston BSG, Mexico, has strategically positioned itself to support this new wave of investment. In preparation for Venezuela’s Hydrocarbons reform bill, it has expanded its specialised services and industry verticals to meet the needs of international energy players, including enhanced cross-border tax planning, JV structuring, operational audit, and compliance advisory tailored to the sector’s regulatory complexity.
The BSG team also offers expat taxation support, due diligence support, OFAC sanctions-ready compliance for upstream and downstream projects, and guidance on navigating evolving trade, banking and currency frameworks.
As Venezuela redefines its energy strategy, investors require partners who understand both the opportunity and the risk. Kreston BSG offers advisory support to clients assessing and operating energy projects within Venezuela’s regulatory environment.
