Venezuela showcases new upstream fiscal framework in London

Industry leaders at a London showcase said Venezuela’s new hydrocarbons rules could make the country more competitive for upstream investment by cutting taxes and easing operating constraints. The reforms come as production recovers and organizers gear up for Venezuela Energy Week 2026 in Caracas.

Why it matters: - Venezuela’s new hydrocarbons framework could reshape the economics of upstream investment by lowering the government take and simplifying a tax system that had deterred capital. - Industry speakers said the changes may help attract operators back to a market that is seeing production recovery and renewed investor attention. - The framework could also support near-term output growth if operators deploy more capital under the new terms.

What happened: - Industry leaders discussed Venezuela’s updated hydrocarbons regime at the Venezuela Energy Week London Industry Showcase on Thursday. - The showcase was held for international investors and industry stakeholders in London. - The new regulations entered into force in July. - Venezuela Energy Week 2026 is scheduled for October 26-29 in Caracas. - The London showcase is the first in a series of international engagements ahead of the Caracas event. - The Caracas conference will bring together government officials, international operators, investors and technology providers.

The details: - The framework replaces more than 20 legacy taxes with a streamlined fiscal system. - The new terms set combined government take as low as 20% on greenfield upstream projects. - The system pairs a variable royalty with the Integrated Hydrocarbons Tax. - Combined rates are 20% for greenfield developments and 25% for extra-heavy and diluted crude projects. - The windfall tax and shadow tax have been repealed. - Industry analysis presented at the showcase said the reforms place Venezuela among Latin America’s most competitive upstream jurisdictions. - Carlos Bellorin, executive vice president of macro analysis at Welligence Energy Analytics, said the firm modeled expansion under the new framework and found Venezuela highly competitive on a global scale. - Bellorin said production has recovered to about 1.2 million barrels per day. - Bellorin said Welligence expects output to reach 1.4 million to 1.6 million barrels per day by the end of 2026. - Bellorin said below 2 million barrels per day, the business case is driven by operating expense. - Bellorin said once production moves above that level, major companies are needed to scale further. - Juan Carlos Andrade, CEO of Araya Energy Group and director and legal counsel at the Venezuelan Petroleum Chamber, said the overhaul removed constraints that had previously pushed operators toward contractual workarounds. - Andrade said operators now can trade their own barrels, manage their own cash flow and develop on-site power generation. - Andrade projected that Productive Participation Contracts could add 250,000 to 500,000 barrels per day. - Andrade said mixed operating companies could contribute a similar volume. - Andrade said those two contract structures are expected to anchor Venezuela’s near-term production growth.

Between the lines: - The policy shift appears designed to turn Venezuela’s resources into bankable projects by reducing fiscal complexity and giving operators more control over operations. - The comments in London suggest the investment pitch now rests less on theory and more on the combination of legal reform, rising output and a more predictable commercial structure. - The repeal of taxes viewed as barriers for high-capex projects signals a clearer effort to reopen the market to larger international players.

What's next: - Venezuela Energy Week 2026 will serve as the next major forum for the country to court investors and explain the new regulatory regime. - The government and industry participants are expected to use the Caracas event to present upstream opportunities and longer-term energy plans. - Production trends over the rest of 2026 will be a key test of whether the new framework can convert interest into sustained investment. - The CAF Recovery and Reconstruction Fund for Venezuela is seeking contributions for earthquake relief, emergency assistance and long-term rebuilding efforts. - More information is available through the CAF Recovery and Reconstruction Fund for Venezuela.