Venezuela's acting President Delcy Rodriguez on Thursday signed a law that will open the nation's oil sector to privatization.

Lawmakers in the country's National Assembly approved the overhaul of the energy industry law earlier in the day.

"We're talking about the future. We are talking about the country that we are going to give to our children," Rodriguez said.

Ruling-party lawmaker Orlando Camacho, head of the assembly's oil committee, said the reform "will change the country's economy."

The decision comes less than a month after the US launched a military attack and kidnapped the country's then-President Nicolas Maduro.

Washington has since put pressure on Caracas for access to its oil sector.

President Donald Trump's administration is pursuing an ambitious $100-billion reconstruction plan for Venezuela's oil industry, and intends to manage the oil sales "indefinitely."It has also been pressing US oil executives to invest in Venezuela, but they have so far been reluctant to commit.

What will change for Venezuela's oil sector?

The legislation offers private companies control over the production and sale of oil. It also relinquishes state control of exploration.

Furthermore, the law allows for independent arbitration of disputes, and removes the mandate for disputes to be settled only in Venezuelan courts.

Taxes will be limited to a single contribution of no more than 15% on gross income, and royalties limited to 30%.

It marks a reversal of one of the central tenets of the nation's self-proclaimed socialist movement that has ruled for decades.

"This obviously completely dismantles Hugo Chavez's oil model," oil analyst Francisco Monaldi told the AFP news agency, referring to Maduro's predecessor.

But he pointed out that the state will retain some discretion over the issuing of contracts to private players.

Venezuela sits on the world's largest proven reserves of crude.

It was once a major producer and exporter globally, but years of underinvestment, corruption and mismanagement have hit exploration and production hard. US sanctions in place since 2019 have also contributed to the challenges.

The industry is currently undergoing a slow recovery. Production reached 1.2 million barrels per day in 2025, way up from the 300,000 barrels extracted in 2020.

It's still far from the 3 million barrels achieved at the start of the century.

What does the government expect?

The Venezuelan government hopes the changes will convince US oil majors to return and invest in the country.

Multiple US oil companies operated in Venezuela until 2007.

But the then Venezuelan government under Hugo Chavez tightened state control over the oil sector. This forced the companies to exit the country after refusing to cede majority control to the state.

At present, Chevron has been the only US firm operating in Venezuela, under a special license.

US eases sanctions

As Venezuela was approving the changes, the US began to ease sanctions on Venezuelan oil.

The US Treasury issued a general license authorizing transactions involving the government ⁠of Venezuela and state oil company PDVSA.

The decision marks a change from a previous plan to grant individual exemptions to ​sanctions ​for companies seeking to do business in the country.

Edited by: Louis Oelofse