Interim government violates constitution in oil deals, Mendoza Potellá denounces

Economist Carlos Mendoza Potellá has denounced Venezuela's new Hydrocarbons Law and its recently published regulations, deeming them unconstitutional. He argues that the legislation, particularly the regulations, demonstrates "weakness" and imposes conditions that hinder fair negotiation.

Mendoza Potellá, a recognized expert in oil economics and geopolitics with a background advising the Central Bank of Venezuela and serving as an ambassador, is leading a movement to challenge the law in the Supreme Court of Justice. He asserts that the Constitution remains in effect and is violated by the current hydrocarbon legislation and its implementing rules.

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That law is unconstitutional.

According to the economist, the regulations attempt to downplay negative aspects for corporations and offer better terms for foreign capital when project profitability is not guaranteed. He points out that the legislation provides contractors with leverage, allowing them to alter contract terms if they deem projects unprofitable. Furthermore, the lawyer of the Republic and the National Attorney General's Office have been excluded from mediating disputes between contracting companies and the executive branch.

Potellá questions whether Venezuela is attractive for the promised investments given the global context and the legal and constitutional weaknesses of the law. He suggests that foreign companies might be hesitant due to the perceived instability of the current government and the possibility of policy reversals. He also notes that the opposition, including figures like María Corina Machado, appears to be leaning towards more lenient negotiations with transnational corporations, creating an environment where only a few, like himself, remain staunchly critical.

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This is legislation based on weakness.