Petroleum mixed companies in venezuela

THE PETROLEUM MIXED COMPANIES IN VENEZUELA: IS THE COUNTRY STILL ATTRACTIVE FOR THE INTERNATIONAL PETROLEUM INVESTMENTS? A LOOK AT THE VENEZUELAN NEW PETROLEUM LEGAL FRAMEWORK

Carlos Bellorín Nuñez*

ABSTRACT: The Ley Orgánica de Hidrocarburos (HL) decree of 2001 introduced a new kind of
structure applicable to the oil industry in Venezuela, affecting those international corporations whohad invested in the country’s hydrocarbon sector. This structure was the Empresas Mixtas (MC). This paper identifies the regulatory framework for the MCs. It also attempts to answer the question whether the new framework is an obstacle to attract new international petroleum investment. The paper analyzes the migration process that took place in the last three years to convert the old form ofassociations, mostly coming from the former Apertura Petrolera policy, adopted in the early 1990s, to the current MC.

*

The Author is a Venezuelan lawyer and holds an LLM Degree in Petroleum Law & Policy candidate at the University of Dundee (CEPMLP). He obtained his Law degree from the Universidad Católica "Andrés Bello" (2000), Specialization in Policy and International Petroleum Commerce (thesispending) from the Universidad Central de Venezuela (2005) and a Diploma in Hydrocarbon and Mining Law from the Universidad Monteavila (2006). He began his career at the law firm Bellorin, Guzman & Asociados and served as General Director of an arbitration centre in Caracas. He later worked as an in-house lawyer for two major Orinoco´s Oil Belt joint ventures; Petrolera Sinovensa(PDVSA-CNPC-PetroChina) and PetroPiar (PDVSA-Chevron). He was the LLM student representative and is an active member of the International Association for Energy Economics, the Argentine Oil & Gas Institute, The Society of Petroleum Engineers, and the Energy Bar Association. E-Mail: carbellorin@yahoo.com

TABLE OF CONTENTS
Abbreviations............................................................................................................................ iii 1. INTRODUCTION................................................................................................................. 1 2 THE ARTICLE 5 OF THE ORGANIC LAW AND THE APERTURA

PETROLERA POLICY. ........................................................................................................... 2 3 4 a. b. c. d. 5 THE LEYORGÁNICA DE HIDROCARBUROS (HL) OF 2001 ............................... 4 THE EMPRESAS MIXTAS (MC) .................................................................................. 5 The MC as a State-owned corporation...................................................................... 5 Legal conditions for creation of an MC. ................................................................... 6 MC taxregime............................................................................................................... 6 The MC´s By-Laws. ...................................................................................................... 8 THE MIGRATION PROCESS. ..................................................................................... 9

6.CONCLUSION.................................................................................................................... 12 BIBLIOGRAPHY ................................................................................................................... 14

ii

ABBREVIATIONS

PDVSA MC OSBP HL NOC IOC

Petróleos de Venezuela, Sociedad Anónima Mixed Companies Oil Sowing Business Plan Hydrocarbons Law National Oil CompanyInternational Oil Company

iii

“I do not know, my girl. But I have seen people passing by in trucks. They say that there is oil in Oriente, and that settlements arise beside the oil.” Casas Muertas, Miguel Otero Silva, 1954 “What is the history of Latin America but a chronicle of the marvelous into the real” El Reino de este Mundo, Alejo Carpentier, 1949

1. INTRODUCTION

In 2000, in...