Documents show that Venezuela's proposed oil-reform will give companies operating autonomy and cash proceeds to companies.

Drafts of a proposed overhaul of Venezuela's hydrocarbons laws showed that foreign and local companies could operate oilfields independently through a new model of contract, commercialize the?output?, and receive sales proceeds, even when acting as minor partners of PDVSA.

Delcy Rodriguez, Venezuela's interim president, presented the proposal last week to the National Assembly. The oil industry in Venezuela is expected to be overhauled by amending the landmark oil law of former President Hugo Chavez.

The lawmakers are expected to start discussing the reform? on Thursday following a 50 million barrel oil supply agreement between Caracas & Washington earlier this month. Donald Trump, the U.S. president, said that the deal was reached after the U.S. captured President Nicolas Maduro. It gives the U.S. the control over the main source of revenue for the country.

The 'National Assembly, headed by the brother of the interim president, Jorge Rodriguez, only has a few opposition members and is not formally recognized by America, due to doubts over its legitimacy.

INVESTORS AND OIL COMPANIES DEMAND AUTONOMY Oil companies and potential investors are demanding autonomy in producing and exporting oil as part of Washington's ambitious $100 Billion reconstruction plan for Venezuela's energy sector. They also want to receive cash proceeds from the sale after Chavez nationalized assets and expropriated them two decades ago.

Independent lawyers, however, have warned that the reform is in conflict with Venezuela's constitution, which reserves to the state the main activities of the oil industry. They said that the reform would also require many laws related to oil industry approved by Chavez and Maduro be scrapped.

Some experts claim that the contract model proposed Rodriguez, which would allow companies to independently export and produce oil via contracts with PDVSA is in contradiction to the joint-venture model on which the "hydrocarbons" law is based.

These contracts, which Maduro pushed with little success, and whose specifics were never made public, led to the entry of small operators in Venezuela's oilfields over the past few years, despite U.S. sanction.

The companies will be responsible for their own administration. The state doesn't acquire any debts in this model and the remuneration depends on the % of production, according to a summary that is expected to be released on Thursday.

The proposal would allow the government a reduction in royalties and taxes related to special projects or those that require massive investment from 33% to 15%.

The law adds an independent arbitration option to resolve disputes. This is a request that foreign companies have made for years after disagreements or lawsuits to claim compensation for assets seized in Venezuela.

(source: Reuters)