Interview with Dr. Blas Regnault by Neirlay Andrade for Tribuna Popular, Venezuela.
The recent reform of Venezuela’s Organic Hydrocarbons Law represents far more than a technical modification of the country’s oil regulatory framework. According to sociologist and energy market researcher Dr. Blas Regnault, the reform substantially reduces the Venezuelan nation’s share of the wealth generated by its oil resources, with direct consequences for the country’s ability to finance healthcare, education, infrastructure, and social programmes.
Speaking during the forum “The New Hydrocarbons Law: What Venezuelans Lose,” organized by Grupo La Petrolia, Corriente Comunes, Plataforma Ciudadana en Defensa de la Constitución, Bloque Histórico Popular, and the Communist Party of Venezuela (PCV), Regnault argued that the reform deepens a process that weakens national sovereignty over the country’s strategic energy resources.
Oil as National Heritage
Regnault recalled that for more than a century, oil has been a cornerstone of Venezuela’s economic and political development. For this reason, he argued that the debate surrounding the reform should be approached from a national perspective rather than a purely commercial one.
“What is at stake is the dismantling of the Venezuelan nation as an economic actor,” he said.
Historically, he explained, the nation’s participation in oil revenues has been secured through three principal mechanisms: royalties, taxes, and dividends derived from the State’s ownership stake in the oil industry.
Royalties represent compensation paid to the nation as the owner of the country’s oil reserves. Taxes reflect the sovereign right of the State to tax economic activity, while dividends arise from the participation of the State-owned oil company, Petróleos de Venezuela (PDVSA), and joint ventures.
“These are three distinct mechanisms, each with different legal and social foundations, that ensure a significant portion of the country’s oil wealth remains in Venezuela,” he explained.
Lower Royalties
One of Regnault’s principal concerns is the greater flexibility introduced into the royalty system.
He stressed that royalties should not be regarded as a production cost—as frequently argued by some government and industry representatives—but rather as compensation owed to the owner of the natural resource.
“Royalties are paid before wages, profits, or taxes. They recognize the nation’s ownership rights over the subsoil,” he stated.
According to calculations presented during the forum, the new legislation allows royalties to be reduced to extremely low levels and, under certain contractual arrangements, even to zero.
As an illustration, Regnault explained that with oil selling at US$86 per barrel, a 30 percent royalty would generate approximately US$25.80 per barrel for the nation. At a royalty rate of just 5 percent, government income would fall to approximately US$4.30 per barrel.
“We are talking about an enormous loss of public revenue without any change in oil prices or production levels,” he said.
Billions of Dollars Less for the Country
Using oil marketing data from the first quarter of 2026, Regnault estimated that Venezuela’s oil industry generated approximately US$9 billion in just three months.
Under the legal framework that existed before the reform—with a 30 percent royalty, petroleum taxes, and significant State participation in joint ventures—the public sector would have received approximately US$5.535 billion, representing more than 60 percent of total oil income.
Under the mechanisms established by the new law, however, the State’s share could fall to approximately US$1.576 billion, or just 17.5 percent of total revenues.
The difference exceeds US$3.9 billion in a single quarter.
“This represents a severe contraction in the share of oil income that remains in the hands of the nation,” he warned.
Fewer Resources for Healthcare and Education
According to Regnault, the consequences extend well beyond accounting figures.
He argued that the revenues no longer captured by the State could otherwise finance hospitals, schools, drinking water systems, and social programmes.
“We are talking about resources sufficient to finance dozens of hospitals or hundreds of thousands of classrooms,” he said.
In his view, the reform weakens the Venezuelan State’s future capacity to meet the population’s essential needs while increasing dependence on both domestic and foreign private interests.
Greater Executive Discretion, Less Democratic Oversight
Another concern raised by Regnault is the expansion of discretionary powers granted to the Executive Branch in oil policy.
He argued that the new legislation weakens institutional oversight mechanisms while reducing parliamentary and public supervision over strategic decisions concerning Venezuela’s hydrocarbon resources.
“National oil policy cannot depend exclusively on decisions made by the Executive Branch. That is dangerous both for the Venezuelan people and for investors themselves,” he stated.
In his assessment, the reform consolidates a model characterized by greater opacity and weaker accountability.
Transparency and Public Oversight
To address these concerns, Regnault proposed a comprehensive agenda for greater transparency within the oil sector.
Among the measures he recommended are the publication of information regarding actual oil sale prices, discounts granted, royalty rates, taxes paid, contracts awarded, investment commitments, and the final allocation of public revenues.
“Without transparency, there can be no meaningful public oversight,” he said.
He also called for the restoration of stable legal rules approved through democratic institutions and for stronger citizen participation in supervising Venezuela’s oil industry.
The Social Legitimacy of Oil Wealth
Regnault concluded that the long-term political sustainability of Venezuela’s oil industry depends on whether citizens perceive tangible benefits from the country’s hydrocarbon resources.
“Venezuelans have always understood that when oil prices rise, the country’s revenues increase. If that relationship disappears, so too does the social legitimacy of oil production,” he said.
For that reason, he argued that the debate over the reform should not be confined to corporate or financial considerations. Instead, it should focus on a more fundamental question: how much of Venezuela’s oil wealth will continue to belong to the nation, and how much will ultimately pass into private hands.
According to Regnault, this is the true significance of the reform introduced through the new Organic Hydrocarbons Law, and the reason why, in his view, the Venezuelan people stand to lose the most.
Contact: bregnault@proton.me
Editorial Note: The views and opinions expressed in this interview are solely those of Dr. Blas Regnault and do not necessarily reflect the views of Diplomat Magazine. This interview was originally conducted by Neirlay Andrade for Tribuna Popular in Venezuela and is republished in English for the information of our international readership.
