75 Years after the 1943 Agreements

Lessons and Proposals for the Reconstruction of the Oil Sector

March 13 of this year marked the 75th anniversary of the promulgation of the Hydrocarbons Law of 1943. This law, together with the agreements that accompanied it, created the foundations of the longest lasting stage and the most vigorous expansion of the Venezuelan oil industry. This report explores the lessons to be learned from everything that has happened in the Venezuelan oil sector since that law, in order to examine how it may be possible to facilitate the recovery of the hydrocarbon sector. The ultimate purpose of this essay is to make basic proposals for the reconstruction of the national oil sector for years to come.
The essay is divided into six parts. First, we describe the magnitude of the expansion of the oil sector between 1943 and 1958, both in terms of production and income. In the second part, we will describe the national and international contexts in which the agreements were reached, and the law approved. Third, we describe the pillars of the agreements. In the fourth, we compare the situation of 1943 with 2018, underlining similarities and differences. Fifth, we will highlight lessons that can be learned from that reform. And in the sixth section, we make concrete policy proposals for the recovery of the national oil sector in the eventuality of a change in the national political situation in favor of a regime guaranteeing democratic and economic freedoms.

Ramón Espinasa, Ph.D. is the General Coordinator of the Extractive Sector Initiative at the Inter-American Bank.

This report is made possible by general support to CSIS. No direct sponsorship contributed to this report.

Ramón Espinasa

General Coordinator of the Extractive Sector Initiative at the Inter-American Bank