For the first time in nearly 20 years, Venezuela is writing rules to let foreign oil companies actually run things on its soil. The country circulated a draft of those rules this week, and the energy industry has been waiting on this document for months.
The world's largest known oil reserves sit under a country that has been almost completely cut off from western capital, and that's starting to change.
The draft is 63 pages long and covers the practical mechanics of running an oil business in Venezuela.
It sets standards for private companies in areas that state-owned Petróleos de Venezuela - known as PDVSA - has held a monopoly on for decades. Those include refining crude, upgrading the country's heavy oil to make it usable, and trading the output globally.
All of that is now open to private operators under the new framework, while the draft also formally abrogates the 1943 oil law and 1969 regulations. Those are the rules that have governed the sector for the entire careers of every working executive in the country.
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This is the next step in a fast-moving reset of US-Venezuela energy policy.
The bigger reform passed in January after the US captured former President Nicolás Maduro, with Acting President Delcy Rodríguez signing it within hours. That law lets private companies operate fields, sell their own crude, and bring disputes to international arbitration courts instead of Venezuelan ones.
It also allows royalties on tough projects to drop from 30% all the way to 15%. The Trump administration has been pushing hard for US energy companies to plug in, since reopening Venezuelan production is a side door for cooling oil prices while the Strait of Hormuz stays disrupted.
But western oil majors aren't exactly rushing in, after Exxon and others got their assets seized when Hugo Chavez nationalized the sector in 2007. Those companies have spent the years since trying to claw back billions, and Trump still hasn't said when he'll lift the sanctions on Caracas.
Three questions decide whether this becomes a real story for investors.
The first is sanctions, since foreign companies can't operate at scale until Washington gives them permission. The second is the political situation, with Venezuela having no election date and Rodríguez consolidating power.
The third is the price guarantee, because the new royalty rates and arbitration rules look great on paper, but oil majors will want hard contracts before they put real money down.
The draft is a rulebook for a game that hasn't started yet.
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Source: Bloomberg