Economy
The Law for the Development of Petrochemical Activities allows private companies to control up to 50 percent of mixed companies and provides for the creation of special zones. However, there is a provision in the legal text which states that upon its expiration date or its termination for any other reason, unless the parties agree to extend the contract, the assets of the companies must be handed over to the Venezuelan State to guarantee the continuity of such activity.

The legal instrument, which partially revoked the law on the development of petrochemical, carbochemical and related activities, which will leverage the development of the industry, provides that the government "will keep control" of the mixed companies, even when it shares a 50 percent stake with a private company. According to the text, the Venezuelan State may not own "less than 50 percent of the capital stock."

Under the instrument, mixed companies will have a duration of 25 years. This period could be extended, depending of the scope of the negotiations between the state and private companies. Partnerships shall ensure Venezuela the provision of technology, encourage petrochemical industrialization, secure the maintenance of facilities, and offer advantages with respect to products in the domestic market.

The Minister of Energy and Petroleum and President of the state-run oil company Petróleos de Venezuela (Pdvsa), Rafael Ramírez, recently said that there is an investment plan exceeding USD 13 billion to allow a greater supply of inputs for the domestic market.

Industry sources said that the main Venezuelan petrochemical industry (Pequiven) began talks to kick off the migration to the mixed company regime. However, the law does not provide for any deadline for completing the process.
dbuitrago@eluniversal.com

Translated by Gerardo Cárdenas

Deisy Buitrago
EL UNIVERSAL