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Mondial | Publication | April 2018
On April 12, 2018, the president of the Bolivarian Republic of Venezuela issued a Decree published in Official Gazette N° 41,376, also dated April 12, 2018, establishing a special and transitory regime on operational and administrative matters applicable to the Venezuelan oil industry (the Decree).
The Decree sets forth a series of temporary measures on operational and administrative matters concerning the oil industry, which measures include granting certain powers to the Minister of the People’s Power for Petroleum (the Petroleum Minister), with the purpose of increasing the productive capabilities of Petróleos de Venezuela (PDVSA), its affiliates and the national petroleum industry (the Transitory Regime).
The Decree sets forth that the Petroleum Minister shall exercise the broadest powers in respect to organizing, managing and administering public sector oil companies, particularly PDVSA and its affiliates. Such new powers allow the Petroleum Minister to:
Representatives, directors or individuals responsible for public sector oil companies must carry out the steps required to materialize the above-mentioned amendments, as instructed by the Petroleum Minister.
Amendments to rules or by-laws of public sector oil companies made pursuant to the Decree may modify the provisions of the respective incorporation decrees of the companies of the petroleum public sector.
PDVSA and its affiliates are now required to acquire certain goods, services and works based on a price comparison methodology. Such goods, services and works include:
In addition, according to the Decree, the following goods, services and works will be acquired through the direct award of contracts methodology:
Contracting entities must guarantee observance with principles of rationality and efficiency in contracting, and have available mechanisms to optimize the procedures of price consultation and purchases, avoiding intermediaries and giving preference to direct purchasers to producers.
The Decree orders that professional, specialized, technical and administrative personnel and workers currently in national and international assignments must return to their original positions in order to consolidate efforts in their corresponding areas in accordance with the needs of the national oil industry.
The Petroleum Minister must provide quarterly reports to the president and notify the comptroller general of the republic about compliance with the Decree.
The Petroleum Minister may decide to cease the application of the special transitory regime and administrative measures set forth in the Decree.
The Decree entered into force on the date of its publication in the Official Gazette and is valid until December 31, 2018, but its validity may be extended for a one-year period.
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