Caracas [Venezuela], January 30 (ANI): Venezuela's National Assembly approved sweeping changes to the country's oil laws, granting foreign energy companies greater operational control and opening the door to sharply reduced royalties, a move that could reshape the nation's energy sector, The New York Times reported.

On Thursday, lawmakers enacted legislation that allows overseas firms to directly manage production projects, effectively reducing the role of state-run Petroleos de Venezuela, and permits companies to settle disputes through international arbitration rather than Venezuela's courts, The New York Times reported.

The overhaul also enables authorities to lower taxes and royalties paid to the government, although Petroleos de Venezuela will remain under state ownership.

The New York Times said the move follows recent developments in which the US military captured Nicolas Maduro and replaced him with Vice President Delcy Rodriguez, who has since moved quickly to open Venezuela's oil industry to increased US participation amid pressure from Washington.

The reforms reverse key elements of Venezuela's 2007 nationalisation drive, which had prompted major US oil companies to exit the country despite its vast reserves.

That policy shift had been central to Chavismo, the political movement that has dominated Venezuela for nearly three decades.

Soon after lawmakers approved the changes, the Trump administration announced it was easing sanctions on Venezuela's oil sector, a decision expected to lift restrictions on transporting, storing, exporting and purchasing Venezuelan crude, according to The New York Times.

While the legislation aims to attract foreign investment and revive production, critics warned of long-term consequences.

Former energy minister Rafael Ramirez said on social media, 'In a single stroke, this wipes out nearly 70 years of our national achievements and seeks to cancel the country's nationalist oil ideology.'

The New York Times reported that the new framework also seeks to reassure investors by allowing disputes to be resolved outside Venezuela, reflecting concerns over judicial independence.

However, questions remain about legal stability and the durability of the reforms, given Venezuela's history of abrupt policy reversals.

The changes are expected to provide a short-term boost to Venezuela's oil-dependent economy, which has suffered for years from falling revenues, infrastructure decay, expropriations and US sanctions.

The government also organised rallies in Caracas on Thursday to demonstrate support for the overhaul as it attempts to draw both established companies and smaller operators back into the sector. (ANI)