ConocoPhillips' chief executive, Ryan Lance, told reporters that recent amendments to Venezuela's hydrocarbon legislation fall short of what international oil companies require to commit capital. According to Lance, the revised framework permits the government to impose royalties of up to 30%, taxes up to 15%, and other levies that together could push the state's total take to roughly 95%.
"The current hydrocarbon law is not sufficient to attract a whole lot of investment," Lance said. "A 95% government take will not do it." He framed his comments during an interview in which he assessed the details shared publicly and through industry channels.
People familiar with documentation distributed by Venezuela's state oil company, Petróleos de Venezuela SA, say a proposed contract has been circulated to foreign oil firms. Those people describe terms that tilt in favor of the government on matters such as arbitration, tax treatment and the conditions under which deals can be terminated.
Lance drew a direct comparison between the newly circulated contract language and the arrangements that existed prior to ConocoPhillips having assets nationalized in 2007. "It looks a lot like what we had before we got expropriated in 2007," he said. "It doesn’t look like it’s anywhere near what it needs to."
The proposed contract terms and the law revisions are part of a broader effort, according to the reporting, to restore Venezuelan oil output. That initiative is tied to steps taken after the capture of President Nicolás Maduro and is being pursued by the country's interim leadership, which is identified in the available information as led by acting President Delcy Rodriguez.
Executives across the oil sector have reportedly asked the Trump administration to raise the contract terms as an issue in its discussions with Venezuela’s interim government, according to people briefed on the matter. Those conversations reflect industry concern that the fiscal and legal terms under consideration will not produce the investment needed to scale production quickly.
Context and implications
- The law changes permit royalties up to 30% and taxes up to 15%, with additional levies that elevate the state's overall take.
- ConocoPhillips' leadership believes the effective government take could reach 95%, a level they say would deter investment.
- Contract language distributed by Petróleos de Venezuela SA is reported to favor the government on key commercial protections.